TAIWAN-based tyre company Cheng Shin Rubber Industry Co., touted as the world’s 10th largest tyre company (and aiming an 8th rank global tyre supplier positioning in the future), is expanding capacities to cater to the growing vehicle demand amongst the emerging markets.
Following suit is Kenda Rubber Industrial Co., which said that its positioning itself amongst the world’s top 20 tyre makers.
Reports said that stable raw material prices, natural rubber and synthetic rubber costs are expected to remain low this year and manufacturers benefiting from the cost savings. Cheng Shin, which accounts for 11% of the world’s tyre market and owns four brands, CST, Maxxis, Sakura and Presa, expects production of tyres for passenger cars and trucks to increase 20% this year from the previous year.
Cheng Shin also sees increase in production of tyres for agricultural and industrial vehicles, to double this year. The firm is also increasing production of bicycle tyres by more than 8%.
Its production expansion plans for this year succeeds the addition of production lines to its China plants located in Changzhou and Xiamen.
Meanwhile, Kenda said its new plant in Tianjin, China, is scheduled to start commercial production by July. It has also It is also building a US$333 million factory for car, light truck, trailer and motorcycle tyres in Guangdong, which, by 2016, is expected to produce 83,000 radial tyres per day
The expansion plans of Cheng Shin and Kenda will further strengthen their bottom lines, and a positive trend can be gleaned from the earnings, according to analysts, noting that Cheng Shin has posted a Q1 earnings per share (EPS) of NT$1.50 this year, up from NT$1.18 in the same period last year, while Kenda’s Q1 EPS stood at NT$1.05, up from NT$0.68 in the same period of the previous year.