FINDLAY, Ohio—Cooper Tire & Rubber Co. said during its quarterly investor conference call Aug. 8 that a valuation of its Chinese joint venture in Chengshan should be established by Aug. 11.
The firm has been working on a valuation with Chengshan Shandong Tire after it ceased making Cooper-brand products last July at its plant in Chengshan, China in protest of Cooper's attempted merger with Apollo Tyres Ltd.
Roy Armes, Cooper's chairman, CEO and president, said the firm intends to disclose the valuation of the joint venture, named Cooper Chengshan (Shandong) Tire Co. Ltd.
“We continue to work through that process and regardless of the ownership outcome, China will continue to be an important part of Cooper's long-term growth strategy,” Armes said.
Cooper reached an agreement with its joint venture partner at the end of January regarding the process of determining the long-term owner of CCT. It said once a valuation is established, Chengshan will have 45 days to either purchase Cooper's 65-percent stake in the company or sell its own 35-percent interest to Cooper. Should Chengshan decide not to exercise either option, Cooper has the right under the agreement to purchase Chengshan's share.
Although CCT halted production in the last half of 2013 and the beginning of 2014, CCT has now returned to normal production levels. This includes resuming the production of Roadmaster tires earlier this year and production of all brands is ongoing with the plant now nearly at full production levels. Armes said customers have responded well to Cooper's Roadmaster tires.
“We are regaining our position with 90 percent of our top 30 customers and expect to continue to make progress in the second half,” said Brad Hughes, president of international operations.
Armes said although Cooper does not yet know the resolution of the CCT ownership, it does have the “financial wherewithal to meet all of our obligations, support our growth strategy, including investment in our growth in China through CCT or otherwise along with the accelerated share repurchase to ensure a bright future for Cooper.”
Cooper also is working on a Supply Chain relationship with its joint venture in Mexico and South America. For the first time the company shipped product into South America from its Mexico joint venture.