Bridgestone growth strategy to focus on restructuring, 'solutions' business

TOKYO—Bridgestone Corp.'s growth strategy for the coming decade includes an increased focus on expanding its "solutions" business and forays into areas outside of tire and rubber-goods manufacturing, the company disclosed in its business plan covering the next 10 years.

To be carried out in four stages, the mid-term plan will be aligned with the ongoing Bridgestone 3.0 restructuring program, which is intended to improve profitably across tire and rubber activities, Bridgestone said in a Feb. 16 presentation.

In the first phase, from 2021 through 2023, the Tokyo-based firm aims to rebuild earnings power through measures such as cutting fixed and variable costs and restructuring the manufacturing footprint within its core tire business.

In addition, Bridgestone will focus more on growth areas within its "solutions" business, initiatives that include expanding its tires-as-a-service subscription model, building its recycling/retreading businesses and extending the scope of its connected, IT-based mobility offerings such as Webfleet telematics.

"Solutions" related activities are expected to contribute 20 percent of total sales, up from 16 percent in 2020.

During the first phase, Bridgestone also plans to explore new business fields, such as recycling and soft robotics.

In recycling, Bridgestone is evaluating technologies and business opportunities in regenerating scrap rubber back to near virgin rubber quality along with alternative curing methods that would make recycling easier. The plan also includes efforts to increase the value of retreading through multiple retreadings.

Overall, the company is forecasting sales of $31 billion by 2023, or roughly on par with the revised 2019 revenue, when $1.8 billion in sales of the pending divestment of the Firestone Building Products business in North America are excluded.

Bridgestone also anticipates a return-to-profit by 2023, estimating that it will generate $2.6 billion in bottom-line earnings. For COVID-impacted 2020, Bridgestone reported a net loss, its first result in the red in 70 years.

At the same time, the adjusted operating profit margin should nearly double to 13 percent, Bridgestone said.

The second and third phases of the turnaround strategy, to be carried out between 2024-2026 and 2027-2029, are intended to bolster Bridgestone's earnings power, the company said.

By 2030, the Tokyo-based group aims to have optimized activities within core businesses, fully evolved solutions activities into a core business, and commercialized current exploratory activities.