Toyo budgets $520M for expansions in Asia, US
OSsaka, Japan -- Toyo Tire & Rubber Co. Ltd. is moving ahead with plans to expand its global capacity, budgeting nearly $520 million to expand its 2-year-old tyre plant in White, Georgia and build a passenger tyre plant at an as-yet undisclosed location in Asia.
The expansions reflect Toyo's strategy to reinforce its global supply network to support the firm's growth goals outlined in its latest three-year business plan.
In Georgia, Toyo said it will spend $270 million to double the capacity of the Toyo Tire North America Manufacturing Inc. passenger/light truck tyre plant to 4.4 million units by 2010 and 5.2 million by 2011. These goals were part of the firm's original growth plans outlined when the plant was being built.
The factory has been ramping up output since early 2006 to its original targted capacity of 2 million units, Toyo said, but strong demand and plans for future business expansion in North America prompted management to go ahead now with the Phase 3 expansion, the firm said.
Word of the expansion comes shortly after Toyo disclosed its sales in North America exceeded $1000 million for the first time, advancing 18 percent last year over 2006.
In Asia Toyo is basing its decision to build a plant on its determination that increasing production at its existing plants would not be sufficient to meet expected growth in global demand.
Therefore, Toyo management is scouting Asia for an appropriate location for a new plant capable of producing up to 4 million passenger tyres a year, primarily for international export. The firm has budgeted $232 million for this project, which would come on stream by March 2012.
These projects support Toyo's latest three-year business plan, dubbed “Vision '15,†for 2015, which will mark the company's 70th anniversary. The plan calls for 4.9-percent annual sales growth, to nearly $4 billion, while boosting operating earnings 78 percent to more than $225 million, or about 5.7 percent of sales vs. 3.7 percent for the fiscal year ended March 31.
Among the plan's concrete visions are reinforcing global tire supply/distribution systems and establishing technologies for differentiated products, reforming the anti-vibration rubber activities as a core business and becoming a more environmentally advanced company.
From Tire Business (A Crain publication)
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