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YRC sticking with Grand Design

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TOKYO (Aug. 31, 2009)—Despite the financial regression of the fiscal year ended March 31, Yokohama Rubber Co. Ltd. (YRC) is moving forward with Phase II of its 12-year Grand Design 100 corporate strategy, aiming to achieve a 7-percent operating income/sales ratio by 2011.

Yokohama is counting on its Tire Group to be the main source of the growth for Phase II, with plans in place to expand the firm's presence in the global marketplace through new and upgraded overseas production capacity and by integrating regional operations to support increased globalization.

Achieving a 7-percent operating ratio likely will be a challenge, considering that ratio fell to 2.5 percent for the year ended March 31 from 6 percent the year before and Yokohama expects it to rise to only 3.5 percent for the current year.

Grand Design 100, launched in April 2006, calls for achieving annual net sales of 1 trillion yen and annual operating income of 100 billion yen by the fiscal year ending March 31, 2018. Phase II covers the three years to March 31, 2011.

Other chief financial targets in Phase II are to raise net sales to 550 billion yen ($5.6 billion at mid-May exchange rates) and to lay the groundwork for further growth by increasing free cash flow to more than 30 billion yen.

The plan calls for setting up a tire factory in Russia during 2011 and to restart the suspended expansion project at the firm's tire plant in Hangzhou, China.

YRC also intends to launch its range of "DNA dB super E-spec" green tires to North America and Europe and to increase OE sales of its Advan performance tire line. In the Multiple Business Group, YRC will expand business in high-pressure hoses, conveyor belts and other industrial products.

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