Kenda Rubber of Taiwan Plans New Tire Factory in Huizhou, China

Kenda Rubber Ind. Co., Ltd., a major tire maker in Taiwan, recently announced plans to buy 700 acres in Huizhou, Guangdong Province, China as well as invest about NT$10 billion (US$333.3 million) to set up a new factory, as publicized by Yang Ying-ming, the chairman, at the recent shareholder meeting, adding that the project paves the road to relocate the existing factory in Shenzhen in the same province.

Kenda`s other factory being built in Tianjin should start mass production of passenger car radial (PCR) tires in the late second quarter of 2013, with the total investment in the new plant being about NT$5 billion (US$166.7 million).

C.J. Yang, Kenda`s vice chairman, said the new factory has designed daily capacity of 83,000 PCRs by 2016, with revenues from bicycle and motorcycle tires to take annual consolidated revenue to NT$50 billion (US$1.67 billion). PCR tires account for about 25% of Kenda`s overall revenue and the proportion is expected to grow to 50% by 2016, when the Taiwanese tire maker expects to be a top-20 tire-maker.

Kenda also aims to develop radial truck and bus radial (TBR) tires, and may acquire a private TBR tire maker in China, as well as set up a PCR tire factory in the U.S. or China (Sichuang Province or Wuhan).

Some institutional investors forecast that Kenda`s second-quarter revenue to hit record high, and annual revenue to top about NMT$30.1 billion (US$1 billion) this year.

The new factory in Tianjin is scheduled to start PCR-tire production by the late second quarter of 2012, with the No.1 building`s daily capacity to reach 22,500 tires and to rise to some 25,000 units by 2016, with total capacity to reach about 45,000 PCR tires once the No. 2 building is completed.