SRI to expand South Africa plant

Crain News Service report

DURBAN, South Africa (Oct. 14, 2014) — Sumitomo Rubber Industries Ltd. is investing $100 million through 2017 at its plant in Ladysmith, South Africa, to expand overall capacity and upgrade capacity for high-performance tires.

The capacity expansion — to 12,200 tires a day by 2016 and 14,500 tires a day by 2017 from 9,600 currently — will help support Sumitomo Rubber expand its tire business throughout the African continent and accelerate the pace of its global expansion, the company said at a ceremony marking the opening of its new headquarters for Sumitomo Rubber South Africa Ltd. (SRSA).

The plan includes initiating production of Sumitomo-brand tires, range extensions and quality enhancements to the Dunlop brand, the company said. Sumitomo acquired the plant and rights to the Dunlop brand throughout Africa in December 2013 from India's Apollo Tyres Ltd.

The investment comes at a time when the industry faces challenges from high manufacturing costs, tough labor relations and imported tire competition.

However, SRSA said it is “confident in making the investment and has taken a long-term view of the South African motor industry and African tire market potential.”

The new product ranges will require significant technological enhancements and physical expansion to the 41-year-old plant, according to SRSA. It also highlighted efforts to upskill the workers at the plant and ensure their buy-in to the project.

“The Ladysmith plant is set to undergo significant changes over the next 18 months and we really wanted our employees to feel part of this process and to be excited by the expansion,” SRSA CEO Riaz Haffejee said.

SRSA plans to add a range of radial truck tires by January to its current portfolio of passenger, SUV/4x4 and light truck tires applications and will introduce its new range of truck bus radials in January 2015.

SRSA did not say how the expansion will affect employment at the 3.34 million-sq.-ft. plant, which stands at 1,100.