Taiwanese pneumatic tyre manufacturer Kenda Rubber Industrial Co.is planning to expand its production capacity in Vietnam in order to meet the rising demand for their products.
Kenda’s new plant in Vietnam is scheduled to begin operations in the third quarter of 2017, with an estimated daily capacity of 25,000 units. The company said it would supply car tyres to customers in the US to take advantage of Vietnam’s low-tariff status and maintain the company’s price competitiveness over global rivals.
Kenda produces most of its car tyres at a plant in Kunshan, China, according to a company official who declined to be named.
The US is set to impose a 38.5% anti-dumping tax on tyres imported from China, the official said. So with the US raising tariffs on Chinese tyres, Kenda said the Vietnamese plant would gradually replace the position of its Kunshan plant.
Strengthened by the rising demands from countries like the US and China, Kenda said it expects its sales growth momentum to continue next year.
The company also expects to add 10 to 12 Chinese automakers to its portfolio next year, lending support to sales and profits, it said.
As for the US market, the company’s innovation centre in Ohio is focusing on developing high-end products to attract more customers, such as premium downhill and enduro car tyres.
According to company data, car tyres contributed 38% to total revenue from January to September this year, up from 35% last year.
In the first three quarters of this year, Kenda’s cumulative revenue reached NT$22.3 billion (US$699.3 million), down 7% from NT$23.99 billion during the same period last year.
Net income slid 16% to NT$2.25 billion, or earnings per share of NT$2.57, the data showed.
The company attributed the decline to weakening demand in the global bicycle market and rising rubber material prices.
The company’s bike manufacturing clients, such as Giant Manufacturing Co. and Merida Industry Co., are maintaining their conservative outlook for next year, the official said.
Revenue from bicycle tyres accounted for nearly 22% of Kenda’s total sales this year, compared with 28% last year, company data showed.