Bridgestone Southern Africa (BSAF) has started the process of closing its bias tyre manufacturing plant in Port Elizabeth.
The company says this move is in line with the recently announced mid- to long-term business strategy as set out by the Bridgestone Corporation, which plans to strengthen its core tyre business through a focus on premium/profitable growth segments.
BSAF adds that it has initiated a Section 189 notice and a consultative process in compliance with the South African Labour Relations Act.
BSAF has in recent years seen its financial performance come under pressure, owing to difficult economic conditions and a mixture of industry factors, states the company.
In addition, Bridgestone’s Port Elizabeth plant is geared towards the production of older bias tyres, which are in decline globally, while also being phased out in South Africa as they are regarded as an unprofitable product.
“The effects of a shrinking economy and an influx of cheap imports, compounded by rapid changes in the tyre industry, have prompted BSAF to restructure its operations.”
BSAF says the agricultural industry is also shifting to radial tyres, which are longer lasting, with the production of this product being modern and high-speed.
To produce radial tyres requires an investment in a completely new multibillion-rand plant, which is not feasible in the current economy, it notes.
“All these technical and economic factors combined have created an environment in which the PE factory is unable to continue running, despite all efforts to sustain the operation,” says BSAF CE Jacques Fourie.
“To preserve the competitiveness of BSAF and a sustainable future for its employees, partners and stakeholders, the proposed closure of the Port Elizabeth plant is the only viable option.
“We realise the impact the project will have on the personal lives of Port Elizabeth employees and we are committed to [mitigating] the impact of the proposed closure.
“Fair severance packages will be provided and, where possible, skills will be redeployed.”
BSAF, which employs more than 2 000 people, says it remains committed to its business in Southern Africa and its Brits manufacturing facility, which will continue to produce radial tyres for vehicle manufacturers and replacement customers.