$300M Mississippi Plant Part Of Yokohama Expansion Plan

WEST POINT, MS (AP) — For Yokohama Rubber Co., its $300 million Mississippi plant is its platform to fight for a slice of the competitive North American tire market.

         For West Point, the plant is a ticket out of the economic doldrums that have plagued the northeast Mississippi town of 11,000 for nearly a decade.

         Company and state leaders gathered Monday to dedicate the plant, which has hired about 260 people so far out of 500 promised. Tadaharu Yamamoto, president of the Japanese tire company's Mississippi branch, said Friday it will take up to two years to reach yearly capacity of 1 million truck and bus tires.

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         "This plant is the most modern plant in Yokohama," Yamamoto said. "It's highly automated. The productivity is also good. I believe this quality of products from this plant is the best in Yokohama, I hope."

         Yokohama has plans for three more phases beyond the 1 million-square-foot building it constructed in a pasture. If all four phases are built, the company would invest a total of $1.2 billion and hire 2,000 workers.

         That would be a big boost to West Point, which suffered from sky-high unemployment after Sara Lee closed its traditional cornerstone — the Bryan Foods plant — in 2007.

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         "This town's heart had been cut out when Sara Lee left," said Joe Max Higgins, CEO of industry-recruiting group Golden Triangle Development Link.

         Mayor Robbie Robinson said that although Yokohama hasn't completed first-phase hiring, its arrival spurred optimism. "Now we have hope again, and an economic future in our community."

         Mississippi spent $70 million to incentivize the first phase, along with $12 million by West Point and Clay County. Total state and local incentives, including tax breaks, could total more than $330 million for all four phases.

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         Mississippi Development Authority Director Glenn McCullough Jr. hopes to showcase Yokohama's success when he travels to Japan and South Korea later this month to recruit other businesses. "I think you can make the case that Mississippi is competitive on a global economic development stage," McCullough said.

         Gov. Phil Bryant's Chevrolet Suburban rolls on Yokohama tires as he touts an improving economy in his re-election bid. But the company will need to grab more of the North American market to fulfill its broader expansion plan.

         In 2014, North America accounted for less than 10 percent of Yokohama's sales. Yokohama aims to increase sales here as it builds worldwide capacity from 68 million tires a year to 89 million by 2020.

         The Japanese tire maker is far from the only one expanding domestically.

         Nick Mitchell, an industry analyst with Northcoast Research, said it's a good time to be making tires in the United States. Profit margins have widened as prices for natural rubber and oil have fallen, and demand has been strong, especially for advanced tires.

         "In North America, the tire fundamentals are fairly solid," Mitchell said. "Strong manufacturers with good technology are really benefiting from this shift to higher-value tires."

         – by AP Reporter Jeff Amy

 

 

 

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