Bridgestone to close Port Elizabeth, South Africa bias agri tyre plant
Bridgestone Southern Africa (BSAF) has announced that it will close its bias tyre manufacturing plant in Port Elizabeth, a decision affecting 252 employees. The move is in line with the company’s plans to focus on premium profitable growth segments. The Port Elizabeth plant is geared towards the production of older bias tyres, which are globally in decline and being phased out in South Africa, due to their unprofitability. BSAF is also feeling the effects of a shrinking economy and an influx of cheap imports, leading to its operational restructuring plan. It added that the conversion of the plant to produce radial tyres would require a multi-billion-rand investment, which it deemed unfeasible in the current economy.
“The bias industrial and off-the-road tyres manufactured at the Port Elizabeth plant which have since been trumped by a growing trend in the production of radial tyres globally, has meant a steady decline in market demand over the years, eroding profitability for BSAF,” says Jacques Fourie, BSAF chief executive. “All these technical and economic factors combined have created an environment in which the PE factory is unable to continue running, despite all efforts to sustain the operation. To preserve the competitiveness of BSAF and a sustainable future for its employees, partners and stakeholders, the proposed closure of the PE plant is the only viable option,” he adds.
BSAF says the decision to close the PE plant was not taken lightly, with “many other alternatives,” considered. These included cost containment measures, the sale of the plant to a suitable buyer, export opportunities, public funding and possibly relocating different product lines to PE. However, it said that current market dynamics make it “extremely challenging to find a longer-term sustainable solution.”
BSAF said it would exercise due diligence to ensure compliance with all legal requirements and accepted practices, as well as to ensure that all affected employees are treated fairly and supported through the transition.
“We realise the impact the project will have on the personal lives of PE employees and we are committed to mitigate the impact of the proposed closure. Fair severance packages will be provided and where possible, skills will be redeployed,” Fourie concludes.
BSAF employs more than 2,000 people. Bridgestone says it remains fully committed to its business in Southern Africa and its Brits manufacturing facility which continues to produce radial tyres for OEMs and replacement customers.