9/17/2014

Cooper eyes Latin/South America for growth

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By Bruce Davis

FINDLAY, Ohio—Cooper Tire & Rubber Co. is targeting Latin/South America for exponential growth as part of its global expansion strategy.

Cooper, which has set up sales agents in 21 Latin American and Caribbean nations, anticipates selling 4 million to 5 million units throughout Latin America by 2020, according to a presentation the company made earlier this year to investors and stock analysts.

The company did not disclose its current rate of sales for comparison, but it refers in its presentation to expected reductions in duties throughout Latin America as a reason for its optimism.

To do so, Cooper expects to leverage its manufacturing capacity in Mexico, where it said in the investors' presentation it has the opportunity to expand by 50 percent. It did not elaborate on those plans, saying only it expects to be able to take advantage of “low cost, near-sourced manufacturing” that offers a “faster response to market demand changes.”

Capacity at the company's plant in Mexico, the Corporación de Occidente S.A. de C.V. factory in El Salito, is listed at 18,500 car and light truck tires daily.

“To date, we have built a strong position in Mexico and are beginning to expand into Central America. These new markets are attractive to us, and we believe we can reach more than 4 million units in Latin America by 2020,” Cooper Chairman and CEO Roy Armes said in an interview earlier this year.

Armes said having a plant in Mexico provides customers in the region with a local source of supply, “while partnering with key distributors that will help, we believe, propel the Cooper house-branded value proposition.”

He said it gives the company an advantage as import duties from countries such as Brazil, Argentina, Bolivia and Ecuador do not apply to products from Mexico.

Since that interview, Cooper has hired Mark Chung—formerly with Yokohama Tire Corp. and Ford Motor Co.—as vice president, strategy and business development for the Americas.

In his new role, Chung will lead the development and execution of Cooper's North and South America business strategy, spearheading business intelligence and business development and establishing processes to support the company's growth initiatives in North America.

In addition to the network of distributors for its Cooper brand, Cooper has assigned distribution rights to the Mastercraft brand to Tire Group International L.L.C. throughout Central America and the Caribbean.

The contract, recently renewed, also designates TGI as a fill-in distributor for the Cooper brand in the Caribbean, allowing customers in the region who buy direct from Cooper the benefit of a quick source of supply when required.

Global network

Cooper's network of distributors in Latin/South America

c Aruba: Global Trading Aruba N.V.

c Argentina: Fortalein S.L., Buenos Aires.

c Bahamas: Multi-Auto Parts & Accessories Co. Ltd., Nassau.

c Bolivia: Socoser S.R.L., La Paz

c Brazil: Japura Pneus, Manaus; and Super Tire Coml Imp e Exp Ltda., Sao Paulo

c British Virgin Islands: Virgin Island Motors Ltd., Tortola

c Chile: Off Road S.A., Santiago

c Colombia: Interdespro C.I., Bogota

c Dominican Republic: Cabrera Motors CxA, Santo Domingo

c Ecuador: Conauto/Tire City, Guayaquil

c Grenada: Spice Island Traders Ltd., St. George's

c Guatemala: Autopartes de Guatemala S.A., Guatemala City

c Honduras: Servicentro Baran-dillas, San Pedro Sula

c Martinique: Pastel, Lamentin

c Paraguay: GyS Cubiertas S.A., Asuncion; and Yhaguy Respuestos, Fernando de la Mora

c Peru: Llantas Heintz S.A., Lima

c St. Vincent: Paul's Tyre Shop Ltd., Kingstown

c Trinidad: Mileage Mack Ltd., San Fernando

c Turks & Caicos Islands: Mackie's Auto & Truck Repair, Providenciales

c U.S. Virgin Islands: Tropic View dba HH Tire & Battery, St. Croix; and Rodriguez Auto Parts Inc., St. Thomas

c Uruguay: Elia Alineaciones S.R.L., Montevideo