Bridgestone forecasts profit jump by 2012

Bridgestone Corp., Japan's largest tyre maker, aims to boost profit by nearly two-thirds by 2012 as it looks to tap growing demand in emerging markets such as China and Russia.

Bridgestone, which outlines a five-year roadmap on a rolling basis every year, forecast an operating profit of €3 billion up 64 per cent.

The new targets represent slight upgrades to its forecast a year ago for operating profit of €3 billion.

"In the medium to longer term, demand for tyres will be very strong," chief executive officer Shoshi Arakawa told a news conference.

"We expect continued strong growth in demand for cars in the developing world," he said, referring to Brazil, Russia, India and China.

Bridgestone, whose competitors include Goodyear Tyre & Rubber and Michelin, said it would aim for a higher level in 2013.

For the year to December 31, Bridgestone has forecast a 38 per cent drop in operating profit to €1.1 billion citing a stronger yen and expensive raw materials.

The company's aggressive midterm plan comes as emerging economies including India, China and Russia continue to grow - albeit at a slower pace of late - fanning tyre demand for both vehicles and construction and mining machinery.

It also comes in the face of crumbling demand in the key US automobile market.

Bridgestone said it expected to spend an average €2.1 billion in capital expenditures annually during the five-year period to 2013, the same level as 2008, up from the €1.8 billion projected a year ago. Chief financial officer Koki Takahashi said that was partly due to the rise in the prices of raw materials.