Yokohama to close OTR plant in Israel by year-end

HIRATSUKA, Japan—Citing high operating and logistics costs, Yokohama Rubber Co. Ltd. (YRC) is closing its off-the-road (OTR) tire plant in Hadera, Israel, by year-end.

The facility, one of more than 30 tire plants YRC operates across the globe, is more than 70 years old, the company said. The plant—called the Alliance Tire Co. Ltd., and member of the Yokohama Off-Highway Tires (YOHT) group—produces 42,000 metric ons of farm, earthmover and industrial bias and radial tires per year and has a workforce of 474.

This marks the second plant closure announced this month by a Japanese-based tire maker. On Nov. 7, Sumitomo Rubber Industries Ltd. (SRI) said it was closing its 102-year old factory in Tonawanda, N.Y., affecting 1,500 employees.

The factory was established in 1952 by Israeli investors as Alliance Tire Co. Ltd. and acquired by Yokohama in 2016 as part of its purchase of Alliance Tire Group (ATG)

YRC blamed higher costs and logistics for the plant closure. The tire maker said other major tire manufacturers have established plants in Southeast Asia, putting them closer to raw material while "leveraging the abundance of labor at lower costs."

YRC said this has results in "conversion costs in Israel to become uncompetitive compared to the Asian producers. Busy export routes passing through the South Asian countries have also brought down the costs of transporting tires to key markets, further tilting the competitive advantage away from Israel and severely increasing the relative production costs affecting the exports."

Given those issues, the market environment and the "structural shift in the manufacturing footprint of the tire industry," YRC said the decision was made to ensure "a sustainable level of profitability and secure its future."

YRC said it would consolidate its production footprint in order to align better with more favorable market conditions.

"Closure of the Israel plant is a difficult but necessary step to ensure the long-term sustainability of YRC," the company said, without elaborating on what actions it will take regarding the plant's employees, other than to say: "We are committed to supporting our employees, partners and vendors during this transition and are engaging with them to minimize the impact of this decision."

Yokohama said it is the world's largest manufacturer of agricultural tires and second in the industrial tire segment, and it intends to grow its market share.

In late July, YRC acquired Goodyear's off-the-road tire business in a $905 million cash sale that significantly bolstered the Japanese tire company's OTR unit for the second time in a little more than a year.

Goodyear's OTR business included specialized tires for mining and construction, among other industries. The sale is expected to close by early 2025.

In May 2023, YRC completed a $2.3 billion acquisition of Trelleborg Wheel Systems from Sweden's Trelleborg A.B., effectively doubling the size of Yokohama Rubber's off-highway tire business to better than $2 billion in sales annually.