Sumitomo eyes continued growth in '14

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KOBE, Japan (March 3, 2014) — Sumitomo Rubber Industries Ltd. (SRI) is projecting 6-percent growth in sales this year, led by its tire and industrial products businesses, to go with 4-percent earnings growth.

Sumitomo's projections come on top of double-digit gains in operating and net income in fiscal 2013.

SRI is forecasting fiscal 2014 operating income of about $78 million on sales of $8.2 billion. The Kobe-based tire and rubber goods maker expects to benefit from stable or falling raw materials prices and the effects of increased volume and a better product mix, while falling pricing is expected to be a drag on earnings.

Tire business unit sales revenues should grow about 6 percent, SRI said, based on strong overseas sales offsetting flat to slightly lower domestic demand.

The company projects its tire plants will be operating at 95 percent of capacity this year, up from 90 percent last year. Global capacity is expected to rise 4 percent this year to 54,400 metric tons per month; Sumitomo has a new plant in Brazil ramping up this year and acquired a plant in South Africa, along with Dunlop-brand assets in Africa, from India's Apollo Tyres Ltd.

Tire sales volume in North America — Sumitomo brand through TBC Corp.'s wholesale network and the Falken and Ohtsu brands through Falken Tire Corp. — should be up about 7 percent this year, SRI said, after falling 6 percent last year.

Despite the lower unit sales, SRI's sales revenue in North America rose 9.7 percent to $913 million.

Globally, SRI reported 10.5-percent higher operating earnings for 2013 of $788.7 million while net income jumped 26.4 percent to $458.5 million. Sales revenue increased 9.9 percent to $7.99 billion.

SRI's tire business also reported 10.5-percent better operating income, to $715.5 million, on 10-percent higher sales of $6.97 billion, for a 10.3-percent operating ratio.

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