UITENHAGE, South Africa—Goodyear South Africa Ltd. plans to increase capacity for high-value-added consumer tires at its Uitenhage plant during the next 16 months, while at the same time relocating capacity for truck tires to plants in Europe and the Middle East.
Goodyear is budgeting $50 million toward the project, which it expects to complete by the end of 2016 or early 2017 at the latest.
Goodyear said the expansion will enable it to meet the strong and growing market demand for HVA consumer tires in South Africa and Sub-Sahara Africa, where overall tire demand is expected to show double-digit growth through 2020, led by the consumer segment.
Goodyear did not quantify the scale of the capacity increase at the 68-year-old plant, where capacity is listed as 10,000 units a day of passenger, light and medium truck, farm, OTR and industrial tires.
The tire maker did not disclose details of the move's effect on jobs at the plant, where employment stands at 1,000, but said it intends to consult with the union representatives and employees working in the medium truck radial area to minimize the impact through offering a variety of alternatives.
It also said it would communicate with union representatives, employees, customers, business partners and local authorities throughout the consultation process.
“This is an important investment by Goodyear and is consistent with our strategy to serve the needs of our customers and the company's focus to invest in high return projects that drive profitable growth,” said Jean-Jacques Wiroth, managing director of Goodyear South Africa.
The new technology and accompanying employee training will improve the plant's capabilities to produce low rolling resistance tires to meet growing demand both from the OE and replacement segment, as well as meet increasing market requirements for 4X4 SUV tires, Goodyear said.
The company did not identify which factory or factories in its Europe, Middle East and Africa business unit would add the truck radial capacity being phased out of Uitenhage.
Goodyear has eight plants in the region with truck tire capacity: Montlucon, France; Hanau and Wittlich, Germany; Colmar-Berg, Luxembourg; Debica, Poland; Kranj, Slovenia; and Adapazari and Izmit, Turkey.