Taiwan Makers Set Up Largest Bike-Making Industry Zone in Southern China

Kenda Rubber Ind. Co. Ltd. recently announced that the company and more than 10 other Taiwanese bicycle makers have jointly signed an investment letter of intent with Huizhou Zhongkai (HZZK) High-tech Industrial Development Zone in Huizhou, Guangdong Province of China according to Taiwanese news agency CENS.

Kenda is scheduled to invest billions of Taiwan dollars to set up a new tyre factory in southern China. Construction of the new factory is expected to start as soon as possible by the end of the year, and the new facility is expected to kick off mass production in 2014.

New Huizhou plant
Yang Yin-ming, Kenda`s chairman, pointed out that the new Huizhou plant will be similar to the firm`s facility in Shenzhen (Guangdong Province), focusing on production of bicycle tyres. But Kenda won’t rule out the possibility of installing passenger car radial (PCR) tyre production lines at the new factory in the future.

Largest bicycle-making industry zone
 
Kenda has announced a plant-expansion project in southern China for more than one year, and the company got a promise from a senior official at the (HZZK) High-tech Industrial Development Zone to ready a large land area for creating the largest bicycle-making industry zone in southern China.

Revenues and earnings

Kenda`s Shenzhen facility now focuses on production of powered two-wheeler (PTW), bicycle and industrial tyres. About 55% of the products turned out here are for sales in China and the rest 45% are exported. The facility registered revenue of about TWD 6.1 billion (euro 166 million), profit rate of 16% and net earnings of TWD 350 million (euro 9.5 million) in 2011. Industry sources said that the new Huizhou factory will be much bigger than the Shenzhen one as it would be installed with PCR tyre production lines to make products for exports to the Europe and the US markets.