HYOGO, Japan — Toyo Tire & Rubber Co. Ltd. is planning to expand tire production capacity in the U.S. and Malaysia, and is considering additional capacity expansions at new and/or existing plants to fulfill its growth expectations.
Toyo is budgeting $125 million and $187.5 million, respectively, for the U.S. and Malaysian projects, which will add capacities for 2.4 million passenger tires a year at the company's White, Ga., plant and 4.8 million a year at the Toyo Tyre Malaysia Sdn Bhd. plant in Perak, Malaysia.
Toyo's plant in White already is the company's largest wordwide, with annual production capacity of 11.5 million tires. The company said it controls 150 acres of land at the site.
The existing Malaysian plant has a production capacity of 5 million units per year and has sufficient land on site to construct another building of the same size next to it, Toyo said.
Under Toyo's recently completed "Mid-Term '17" management plan, the Hyogo-based company said it expects its tire sales to grow by nearly a third to $3.6 billion by 2020 and operating income to improve by more than 23 percent to $500 million, or 6.5 percent of revenue.
This expansion of production capacity is part of its plan to "strengthen the company's business foundation in order to maximize profits," as stated in its tire business policy.
It is intended to further solidify Toyo Tires' sales of large-diameter tires for pickup trucks, SUVs, and CUVs, where the company claims it already has a competitive advantage.
In North America, the Mid-Term '17 plant also includes optimizing product mix to accommodate market trends, advancing development and technical capabilities to deliver surprising products, improving brand equity, and developing an efficient product delivery system, Toyo said.
As part of its supply strategy, Toyo said it is developing a manufacturing and product delivery structure that optimizes its mix of global logistics and production capabilities, taking advantage of what each production base can offer.
It did not elaborate on the details of this plan.