Bridgestone Outlines Mid-Term Goals

Bridgestone has declared its intention to “establish the status of being the undisputed world number one tyre and rubber company both in name and reality” by means of a new five-year plan unveiled on October 22. This mid-term management plan has been formulated through planning on the part of each of Bridgestone’s strategic business units to maximise use of all global business resources available to them, with these efforts supported by the company’s global management platform.

The intended result of this mid-term plan is an increase in net sales of almost 20 per cent (over its 2007 sales forecast) to 4 trillion yen (£17 billion) by 2012. These funds will be channelled into a number of areas, and to facilitate this Bridgestone will implement a number of key strategies based upon what it calls its “four fundamental management policies.” These strategies include reinforcing and adding value to product areas in which the company has “preceded its competitors”, including run-flat tyres, PCR UHP and winter tyres, as well as Greatec and low profile tyres for trucks and buses. The company also intends to “secure overwhelming competency to ensure long-term superiority” in the area of large OTR radial plus aircraft and motorcycle tyres. Furthermore, Bridgestone reports that “full use” will be made of Bridgestone Bandag, with package solutions being made available to customers in the truck and bus tyre business. This move will potentially see Bridgestone competing on a level in the retreading business previously solely enjoyed by arch rival Michelin, who to date has been the only new tyre manufacturer to market its retreaded products as a tyre option on par with its new tyre range.

Operating income is anticipated to grow by 80 per cent, and Bridgestone says it will expand its supply system to support this. Additionally, according to Japan’s Nikkei newspaper Bridgestone will, starting next year, invest 1.3 trillion yen (£5.5 billion) over five years to boost its global output in the face of rising demand for Bridgestone products. The funds ploughed into this increase in output will be 20 per cent greater than investment during the previous 5 year period, and will enable Bridgestone to begin operations at new factories in Poland, Hungary and Mexico, and also expand other existing facilities, including those in India and Indonesia. The Nikkei added that a new factory in Russia was also under consideration.

Another area of focus under Bridgestone’s five year business plan is the expansion of large tyre output in Japan. Michelin indicates it intends to spend 32 billion yen (£136.3 million) expanding production capacity at is new OTR facility in Kitakyushu, which is scheduled to start operation in the second half of 2009, as well as increasing the production capacity of steel cord for large and ultra-large OTR tyres at its Saga plant. The main applications for the large and ultra-large OTR tyres will be mining and quarrying vehicles used around the world – demand for those tyres has expanded significantly worldwide in step with increasing global production of mineral resources, and Bridgestone expects this demand to remain at a high level.

Expansion work at these two facilities will commence in the second half of 2008, with production scheduled to begin in the second half of 2010. As a result, production capacity is projected to increase by around 50 tons of new rubber a day by the end of 2012, which will be up roughly 20 per cent from the time the current expansion work is complete.