Bridgestone beats the odds
February 18, 2005
Tokyo - Japan's largest tiremaker Bridgestone Corporation on Friday said its net profit for 2004 rose nearly 30 percent as strong US and European sales offset the drag of a high yen and rising raw material costs.
The world's second-largest tiremaker after Michelin of France posted a net profit of ¥114.5 billion (R7.8 billion) in 2004, up 29 percent from 2003 and beating its own forecast of ¥104 billion.
For 2005, the company forecast its net profit would rise 22.3 percent to ¥140 billion as it expands output in China and Eastern Europe where car sales are growing fast.
Revenue is forecast to rise 3.3 percent to ¥2.5 trillion this year after a gain of 4.9 percent to ¥2.42 trillion in 2004 but recurring profit is seen falling to ¥150 billion after rising 8.5 percent to ¥181.60 billion.
Bridgestone's 2004 results were lifted by sharp gains in tire sales in the United States and Europe, which more than compensated for the yen's rise against the dollar and a jump in raw material costs.
Looking ahead, Bridgestone has already raised prices in some markets since the start of the year to compensate for the rising cost of synthetic rubber, carbon black and steel cord.
Bridgestone is also in the process of boosting production by building more factories in many countries where car sales are rising sharply in a bid to overtake Michelin of France as the world's largest tiremaker.
Last month Bridgestone announced plans to build a third plant in Mexico, its 49th in the world. Bridgestone produces tires in 23 countries.
Bridgestone also said it is considering investing ¥50 billion to build plants in Guangdong, southern China, and in Eastern Europe.
Bridgestone is looking at building a fourth plant in China to produce tires for Toyota Motor, Nissan Motor and other major automakers with plants in Guangdong.
In eastern Europe, Bridgestone is looking for a suitable site in the Czech Republic, Hungary or several other countries in the region, to make tires for the eastern European and Russian markets. - AFP
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