TOKYO — Sumitomo Rubber Industries Ltd. is planning to increase capacity for "more advanced tires" at plants in Japan, China, Thailand and Turkey in a move designed to counter rising materials, shipping and energy costs as well as other negative factors arising from turbulent trading conditions worldwide.
At the same time, SRI is undertaking efforts to support a "steady increase" in production capacity at factories in Brazil, South Africa and the U.S. to "promote higher rates of local production for local consumption.
SRI did not disclose how much it's budgeting for the capacity expansions and upgrades, which were disclosed recently along with the firm's first-half financial performance.
SRI plans to:
- Increase capacity for larger-sized passenger tires for electric vehicles (EVs) at SRI's plants in Cankiri, Turkey, and Changshu and Hunan, China; and
- Increase capacity for larger-sized passenger tires at plants in Miyazaki, Japan, and Amati City, Thailand.
SRI said it will work to rein in costs for shipments to North America and Europe — where the impact is greatest — through a "meticulous approach" that carefully considers sales projections and inventory levels in those regions.
The Kobe-based company did not elaborate on the capacity expansions in Brazil, South Africa or the U.S.
In the U.S., SRI is in the second year of a three-year, $122 million investment to increase capacity for car, light truck and medium truck tires at its factory in Tonawanda, N.Y.
The company also is announced investments in 2021 totaling $102 million to update equipment at plants in Japan and Thailand for increased production of tires for SUVs and light trucks, predominantly to support sales growth for these products in North America.
With regard to freight shipping, for instance, SRI expects costs to peak in the near future.
Efforts to reduce raw material costs, meanwhile, will involve cooperation across production, research and development, purchasing and sales and pruning unprofitable SKUs, SRI said.
Separately, SRI announced its plant in Turkey has achieved ISO 50001:2018 certification for its energy-management system. This certification covers a firm's efforts to achieve continuous improvement in the energy performance of organizations by taking a systematic approach to energy management.