Business
Bridgestone to spend $100 million on China plant
December 27, 2005
TOKYO (Reuters) - Bridgestone Corp., Japan's top tyre maker, said on Tuesday it would spend about $100 million to build a new synthetic rubber factory in China to meet growing demand worldwide.
The company said the new plant, to be built in Huizhou, Guangdong province, will start operating in the first half of 2008 with annual production capacity of around 50,000 tonnes. It will be Bridgestone's third synthetic rubber plant in the world.
Bridgestone, the world's second-biggest tyre maker after France's Michelin, said in October it planned capital outlays of $5.2 billion in three years to boost global output as it aims to overtake Michelin.
Separately, the Nihon Keizai business daily reported on Tuesday that Bridgestone would likely post a group recurring profit of 165 billion yen ($1.42 billion) in 2006, 10 percent below its 2005 forecast, the first decline in five years.
Among the factors weighing on profits were rising material costs and higher depreciation charges from new overseas factories, the paper said.
The 2006 forecast compares with a consensus recurring profit projection of 205 billion yen in a poll of 12 analysts by Reuters Estimates.
For the current year ending this month, the company forecast a group recurring profit of 183 billion yen, which would be up 0.8 percent year-on-year.
The paper said Bridgestone's operating profit in 2006 will likely fall 5 percent to some 188 billion yen on sales of 2.8 trillion yen.
A company spokesman said material costs may have risen more than expected due to high oil and steel prices, but declined to confirm the figures in the report.
Shares in Bridgestone fell 1.8 percent to close at 2,440 yen. The Nikkei average was down 0.86 percent.