Sumitomo to make tires in China
KOBE, Japan-Sumitomo Rubber Industries Ltd. plans to set up a tire plant in Jiangsu, China, with production to start by 2004 and reach a daily capacity of 5,000 passenger tires by 2006.
Sumitomo, which makes and markets Dunlop brand tires in Japan and selected Asian markets, also expects to report a loss for 2001, due in part to special charges related to stock losses and fixed assets.
The tire maker will spend $55 million to set up the plant. It did not say whether it would have a Chinese partner for the venture but is expected to invite an unnamed Taiwanese tire maker to be a minority stakeholder. Sumitomo, which has a global sales and manufacturing agreement with Goodyear, has a technology supply agreement with Taiwan's Hwa Fong Rubber Industry Co. Ltd.
Sumitomo said it will lose nearly $67 million in 2001, down from an earlier forecast of $47 million in earnings. Sales will reach nearly $3.4 billion, a 1.6-percent drop from earlier forecasts, the result of declining demand.
For 2002, Sumitomo will cut capital investments by 25 percent and reduce personnel, production and other costs by 3 percent. It also will restructure its underperforming non-tire businesses, including sporting goods, industrial products and European bedding units.
Goodyear investing in China plant
DALIAN, China-Goodyear plans to invest $120 million at its plant in Dalion to nearly triple production capacity for passenger tires, including performance lines, by year-end 2006. The tire maker also plans to expand the number of its affiliated retail stores in China by nearly a third, to 2,100, by 2005.
Goodyear Dalian supplies high-performance radials to several car makers in China, including local subsidiaries of Volkswagen A.G. and its Audi subsidiary, General Motors Corp., and France's Peugeot-Citroen S.A. The performance market in China is largely H-rated, a spokesman said, but demand for V- and higher-rated tires, as well as for tires for four-wheel-drive vehicles, is growing.
Capacity at the Dalian plant, which Goodyear took over in 1994, will rise to 5.3 million units a year from 1.9 million, the company said.
``Goodyear is well poised to continue its growth in the China market, which is clearly destined to be one of the world's biggest long-term business opportunities,'' said Hugh Pace, president of Goodyear Asia.
Included in the retail store expansion is growth of premium ``Eagle Store'' format outlets, which offer automotive services and tires.
Goodyear's minority partner in the venture is Dalian Rubber General Factory. Goodyear's ownership is being contested by China Enterprises Ltd., which is pursuing a $3.5 billion lawsuit that accuses Goodyear of racketeering and trade libel in its dealings in 1994 with Dalian.
Michelin marketing snow chains
PARIS-Group Michelin has introduced a Michelin-branded line of snow chains in Europe in a move to extend the brand into new consumer markets worldwide.
The tire maker is positioning the chains as a premium product, touting its ``new technology and innovation'' designed to enhance performance and ease fitment. The company has been distributing the chains to car dealers, car accessory outlets, independent specialists and tire retailers throughout Europe this winter in Belgium, France, Italy, The Netherlands, Poland, Scandinavia, Slovenia, Spain and Switzerland. Wider distribution will follow in 2002 and 2003.
Michelin did not identify the manufacturer of the chains. The company's licensing program is aimed at three categories: transport-related products; sport and leisure; and home, travel and personal accessories.
Michelin, Tigar forming venture
CLERMONT-FERRAND, France-Group Michelin plans to form a joint venture with Yugoslav tire maker Tigar A.D. to make and market tires and tubes.
The companies signed an agreement Dec. 13 to set up the venture under new Yugoslavian Company Law provisions. The venture builds on a relationship dating back to 1978 when Tigar and BF Goodrich Inc.-whose tire operations are now part of Michelin-entered a similar agreement under then legislation in the country.
``After a 23-year-old successful relationship, the parties wish to continue their collaboration in the frame of a joint venture, now that Yugoslavian Company Law makes it possible,'' Michelin said.
Tigar employs about 1,125 at its plant in Pirot, Serbia, which has a capacity to make 11,700 car, light truck, truck, farm and industrial tires per day.