FINDLAY, Ohio (Feb. 28, 2012)—Cooper Tire & Rubber Co. plans to boost capital spending this year by as much as 35 percent to support growth initiatives such as ramping up the former Trayal Corp. plant in Serbia and implementing an enterprise resource planning system.
Cooper plans capital expenditures this year of $180 million to $210 million this year, up from $155 million invested in 2011 and $120 million in 2009.
Noting this is higher than Cooper's traditional capital spending, Cooper CEO Roy Armes said the company believes is “appropriate relative to the strength of our balance sheet and the growth of our business.”
Armes said Cooper anticipates matching last year's first-quarter operating profit performance—$32 million, or 3.5 percent of sales—this year despite costs of as much as $30 million to cover measures taken to “protect the supply of tires to our customers” during the worker lockout at Cooper's Findlay plant throughout most of the past three months.
Armes did not offer a full 2012 outlook, but did say Cooper continues to believe that “pent-up demand for broadline tires exists, although it is difficult to predict exactly when that demand will manifest.” He also said focusing on delivering products “that meet ever-changing consumer needs should help to balance our exposure to broadline tires and economic conditions.”
Cooper bought the assets of the former Trayal plant in Krusevac, Serbia, in January for $17 million and has budgeted about $67 million over three years to upgrade the plant—renamed Cooper Tire Serbia—to expand capacity at the idled facility to 3 million units annually.