KUALA LUMPUR, Malaysia (Dec. 16, 2004) — Malaysia's Lion Group, parent of tire maker Silverstone Corp. Bhd., is teaming up with Chinese tire maker Shandong LuHe Group Co. Ltd. to form a joint venture to make Silverstone tires in China.
Lion Group, through its Lion Rubber Industries Sdn. Bhd. subsidiary, will own 75 percent of and provide technology to the proposed joint venture, which would make Silverstone-brand radial passenger, light truck and medium truck tires at a plant or plants in Shandong province and sell them in China.
Lion Group said Lion Rubber would pay for its share of the $40 million initial capitalization with a cash injection of $26 million from internal funds and $4 million in the form of provision of technical know-how.
The companies did not disclose details of the venture's capacity or projected start-up date.
This would be Lion Group's second tire venture in China. It already is a partner in Dong Feng Lion Tyre Co. Ltd., which makes car and truck tires at a plant in Wuhan/Hebei, China.
Lion Group reported $125.5 million in tire sales in 2003 from its Silverstone and Dong Feng Lion units. Silverstone's home plant is in Kamunting, Malaysia.