OSAKA, Japan-Having lost money in three of its last four fiscal years and facing ``harsher operating environments'' in its major markets, Toyo Tire & Rubber Co. Ltd. is implementing a corporate revitalization plan that includes shifting production to lower-cost sites throughout Asia and increasing sales activities in these growing markets. ``We are endeavoring to pursue value-added product development by capitalizing on our exclusive technologies that accurately meet customer needs under the concept of `environment and safety,''' according to Shozo Katayama, president and CEO. ``Thus we are committing ourselves to improving business performance and consolidating the management base.''
In fiscal 1996, which ended March 31, Toyo had to cope with the effects of rising raw materials prices, falling market prices in Japan and an unfavorable yen-dollar exchange rate, according to the firm's 1996 annual report. The result: Toyo suffered a 33.3-percent drop in operating income to $60.7 million and a net loss of $9.2 million.
Sales for the year rose 0.4 percent, compared with fiscal 1995, to $2.63 billion, with ``substantially decreased sales'' in North America offsetting sales gains in Japan and Europe. Toyo's sales in North America are estimated to be $175 million, vs. $200 million in Europe; a year earlier, Toyo put sales in North America at 2.1 million units.
Toyo's globalization strategy took root last year with the establishment of two joint ventures in China: one for tires; one for rubberized fabric.
In late 1995, Toyo teamed up with Taiwan's Cheng Shin Rubber Industry Co. to begin work on a $150 million, 10,000 units/day radial passenger and light truck tire plant in China, due on stream in January 1997. Toyo holds a 30-percent stake in the venture, Cheng Shin-Toyo Tire & Rubber (China) Co. Ltd.
The firm's revitalization plan focuses on the following points:
Restructuring existing business lines;
Ensuring future growth through exclusive technology;
Executing a ``technological renaissance'' in the R&D sector;
Consolidating its comprehensive marketing strengths;
Promoting globalization; and
Establishing a cost-competitive corporate structure.