Sumitomo Rubber to close US tire manufacturing plant

Tokyo – Sumitomo Rubber Industries Ltd (SRI) is to terminate all production activities at Sumitomo Rubber USA LLC and dissolve the Tonowanda, New York-based subsidiary, SRI announced 7 Nov.

The Japanese group linked the decision to a deterioration of productivity and profitability of the unit, which makes tires for cars, motorbikes, trucks and buses –  amid “severe” trading conditions.

The closure decision, it said, was “based on the assessment, that in the North American market, sales of tires produced at the SRUSA facility could not be profitable."

Tire R&D activities carried out at SRUSA will be transferred to SRI America Inc, while the sales structure of Sumitomo Rubber North America remains “unchanged”.

New York-based SRUSA employs 1,555 people and generated sales of around $456 million in 2023 from the 3,150 tonnes/month facility.

Business profit at the unit fell to just $21,000 last year, from $3.6 million in 2022 and $8.5 million in 2021.

As a result of the US closure decision, SRI revised down its forecast for group operating profit in 2024, to Yen5,000 million from its previously  projected Yen56,000 million.

In 2021, SRI has announced plans to invest around Yen10 billion (then €80 million) to increase capacity at the US plant, in response to rising demand from SUV and light truck markets in North America.

Under the project, maximum output of these tire categories at Tonowanda was projected to increase from 6,500 tires/day to 12,000 tires/day by the end of 2023.

Strong demand also prompted SRI to invest $26 million to up production capacity of truck and bus tires at the US plant, from 1,750 tires/day to 2,300 tires/day by the end of 2024.

As well as increasing production capacity, SRI said the investments would improve overall productivity at the New York site.

The Japanese group has operated the Tonawanda factory since 2015 when Goodyear and SRI dissolved their 16-year-old business alliance.

The plant was originally opened in 1923 by Dunlop Tyre Ltd. Prior to the formation of the Goodyear-SRI in 1999, the plant was operated by Dunlop Tire Corp.