Taiwanese rubber tyre company Cheng Shin Rubber Industry Co. is set to start operations of two new tyre plants in India and Indonesia in the second and third quarter of next year, respectively, company spokesman Richard Lo said.
Each plant can produce up to 20,000 motorcycle tyres per day to meet the demands from customers in the region, Lo said.
According to him, new motorcycle sales in India and Indonesia are expected to reach about 20 million and 7 million units per year, respectively. He also added that the company hopes to grab an increasing share of the regional market.
Commenting on the sales outlook for next year, Lo said the company expects sales to grow on the back of robust demand in the global car market and an improving product mix.
Hoping to boost revenue, Cheng Shin plans to manufacture more higher-margin products such as run-flat tyres, which enable vehicles to continue working even when punctured, he said.
The company is also mulling raising its product prices in the first quarter to reflect rising rubber prices, Lo said, but declined to give detailed figures.
Synthetic rubber and natural rubber account for more than 40% of the company’s material costs, company data showed.
Cheng Shin’s main rival in the domestic market — Kenda Rubber Industrial Co. — is expected to raise its tyre prices by between 3% and 7% in the beginning of next year, local media reported.
From January through September, Cheng Shin saw its net profit rise15% to NT$11.01 billion (US$346 million) from a year ago.
Aggregate sales in the first nine months of this year edged up 0.5% to NT$89.7 billion from a year ago, with gross margin improving from 30.2% to 31.73%, the company said in a filing with the Taiwan Stock Exchange.
Cheng Shin attributed the results to increasing sales contribution from higher-margin products, including all-season tyres and run-flat tyres.
The Changhua-based company, the world’s ninth-largest tyre maker, operates 10 plants in Taiwan, China, Vietnam and Thailand.
It distributes a wide range of products under the CST brand, including tyres and tubes for bicycles, motorcycles, all-terrain vehicles, automobiles and trucks.