AKRON-Goodyear and Bridgestone Corp. are heading in opposite directions in the natural rubber plantation business.
The two tire makers completed a deal Aug. 8 under which Goodyear sold its 95-percent stake in Goodyear Sumatra Plantations to Bridgestone for about $62 million.
The transaction makes Bridgestone a bigger player in the natural rubber industry and takes Goodyear out of the business, a Goodyear spokesman said.
The sale, originally announced last December, is consistent with the company´s strategy to focus on core business activities, Goodyear said. The deal is subject to post-closing adjustments.
Goodyear recorded a non-cash, after-tax charge of $15.6 million in the fourth quarter of 2004 in connection with the transaction.
P.T. P.P. Berdikari, a state-owned Indonesian company, owns the remaining 5-percent interest in the plantation.
Bridgestone said it is purchasing the 47,000-acre site, which began operating in 1917 and has about 5,000 employees, to secure a stable supply of natural rubber and increase its research and development in that area. Building independent production capabilities in key raw materials globally is a priority of the firm, it said.
The companies agreed in principle on the sale Nov. 30. Approvals from several Indonesian government agencies were needed before the pact was completed.
The Hevea rubber plantation, located on one of the largest rubber estates in North Sumatra, Indonesia, is the last one owned by Goodyear, which acquired it in 1977.
A Goodyear spokeswoman declined to say precisely how much rubber the plantation produces each year, but it is less than 10 percent of Goodyear´s annual NR needs. All the plantation´s production was used in-house, and the company buys the rest of its requirements on the open market.
The plantation´s activities include the planting, growing, tapping and processing of natural rubber.
Goodyear owned several other plantations, all of which were sold off by the late 1990s, the spokeswoman said.
The company sold its share in Plantaciones de Hule Goodyear S.A.-its Guatemalan natural rubber plantation-in late 1997, and its Belem, Brazil, plantation in September 1994.