Sumitomo Purchased Land for Brownfield Expansion in USA
The
renowned Japanese tire manufacturer bought land in United States for brownfield
expansion of its plant
United
States: In
process of brownfield expansion, Sumitomo Rubber USA, LLC recently purchased a
land area of 6.4 acres near to its tire manufacturing facility located in
Tonawanda, Erie County, New York.
As per the official
authorities, almost 30 years ago, the land was being used by a chemical company
that got devastated due to fire.
Moreover, during October 2015,
Sumitomo took full control of the facility from Goodyear Dunlop Tires North
America plant. Besides that, the company has also unveiled its plan to capitalize
USD87 million in the entire process. Sumitomo called a bid for this land in
December last year.
TechSci Research depicts that
Sumitomo is among the popular tire brands in the United States. The investment
made by Sumitomo for brownfield expansion is anticipated to lead to an enhanced
production of tires by the company in coming years. Eventually, Sumitomo would further
be able to meet the confounding
demand for tires emerging from the country, which would assist the company to
proliferate its sales in coming years in the United Sates market.
According to a recent report published by TechSci Research, “United
States Tire Market Forecast & Opportunities, 2021”, demand
for tires in the United States is forecast to grow at a CAGR of over 5%, in
volume terms, during 2016-2021. The vehicle fleet of the country is dominated
by passenger car segment, followed by light commercial vehicles, medium and
heavy commercial vehicles, off-the-Road (OTR) vehicles and two-wheeler segment.
As a result, the passenger car tire segment held the largest volume share in
the country’s tire market in 2015, and its dominance is anticipated to continue
during the forecast period as well. Leading global tire companies operating in
the United States include Bridgestone, Goodyear, Michelin, Cooper, Continental,
Sumitomo, Hankook, Yokohama, etc. The report also portrays huge potential of
tire market in Southeast and Midwest regions of the country. The vast demand
for tires from these regions can mainly be imputed to the large automobile
fleet size, high population density coupled with the rapid urbanization in the
area.