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Cooper Tire & Rubber Company to buy a majority of China-based Qingdao Ge Rui da Rubber Co., Ltd. (GRT).

Findlay, Ohio: Cooper Tire & Rubber Company, has entered in an agreement with China-based Qingdao Ge Rui da Rubber Co., Ltd. (GRT) and is planning to buy 65% share in the company for around USD93 million. Post the acquisition, the company will be renamed Cooper Qingdao Tire Co., Ltd. (CQT). The acquisition is expected to end during the first half of 2016 on account of certain permits and approvals to be given by the Chinese government.

Qingdao Ge Rui da Rubber Co., Ltd. (GRT) is located north of Qingdao in northeast China and has a workforce of around 600 workers. GRT was established in 2014 when an idle facility was purchased by Qingdao Yiyuan Investment Co., Ltd. (QYI). The production capacity of the Cooper Qingdao Tire Co., Ltd. (CQT) is anticipated to be approximately 2.5 million to 3 million truck bus radial (TBR) tyres annually, at its full capacity. Moreover, the same volume of passenger car radial (PCR) tyres will be produced within the one-million square-foot production facility.

According to Brad Hughes, Cooper’s Chief Operating Officer, “Cooper is excited to take this positive step to secure additional TBR tire supply and further our Asia growth strategy. After a comprehensive review of options, we are pleased to have reached this agreement, which meets our goal of finding a new source of high quality, cost competitive TBR tyres for North America and Asia. As we have previously stated, achieving our goals for growth will likely require a series of actions and today’s announcement is a significant one”

TechSci Research believes that with the acquisition of Qingdao Ge Rui da Rubber Co., Ltd. (GRT), Cooper Tires will expand its presence in China, and thereby increasing its penetration in the Asian tyre market. The newly formed company will act as a source of truck and bus radial (TBR) tyres for Cooper including the Roadmaster brand for the North American market and TBR tyres for Asian and other markets.

The recent report published by TechSci Research, China Tyre Market Forecast & Opportunities, 2020” rising automobile production/sales, particularly passenger cars and electric two-wheelers; as well as high vehicle fleet size, which is amongst the highest in the world are the key factors driving China tyre market during 2010-2014. China’s vehicle production in 2014 was in excess of 60 million units. The country surpassed the United States in the last decade. The country emerged as the largest automobile market and has sustained its supremacy since then.

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