TOKYO (March 22, 2016) — Japan's Kobe Steel Ltd. is planning to open a subsidiary company in China to sell tire and rubber machinery and provide after-sales service to tap into China's growing tire manufacturing industry and service its dozens of existing clients there.
The new company, Kobelco Machinery System Engineering Qingdao Co. Ltd (KMQ), will be based in Qingdao, Shangdong Province. Kobe Steel has invested about $350,000 in KMQ, which will supply rubber mixers, twin-screw roller-head extruders and tire-testing machines used in producing tires and other rubber products.
Establishing KMQ is part of Kobe Steel's plans to achieve a 50-percent share of the world market for rubber mixers, the Tokyo-based company said.
Kobelco's machinery segment represents about 9 percent of Kobe Steel's $16 billion in annual sales, or roughly $1.5 billion. Of that, tire/rubber machinery accounts for roughly for $285 million, according to figures published by European Rubber Journal, a Tire Business sister publication.
Kobe Steel is projecting this business's sales will increase by about $9 million by 2020.
World tire production has been increasing more than 3 percent annually in recent years, with China making up a nearly 40-percent share, the company noted, citing figures from the Japan Automobile Tyre Manufacturers Association. Tire production in China is forecast to grow 5 percent a year to about 650 million units in 2020 from 520 million units in 2015, Kobe said.
To date, Kobe Steel has supplied more than 250 pieces of tire and rubber machinery to China, magnifying the need for after-sales service.
The company's tire and rubber machinery business has manufacturing and sales bases in four locations — Takasago, Japan; Kanchipuram, India; Yiyang, China; and Hudson, Ohio.