Sumitomo Rubber Group: Production capacity expansion at US factory
Sumitomo Rubber Industries, Ltd. announced that it will increase production capacity for passenger car tyres and light truck tyres at its factory in Tonawanda, NY, USA. The company said this is in response to the increased demand due to strong sales of its high-performance tyres for SUVs and light trucks in the North American market.
With a planned investment of USD 96 million, the factory's daily maximum output in these tyre categories will be increased from the current 6,500 tyres per day to 12,000 tyres per day by the end of 2023. At the same time, in response to rising sales of truck and bus tyres in North America, the company will invest an additional USD 26 million to increase production capacity in these categories at its US factory from the current 1,750 tyres per day to 2,300 tyres per day by the end of 2024. In total, the company is planning to invest USD 122 million to increase production capacity and improve overall productivity at its US factory over the coming years.
According to Sumitomo Rubber, due to the ongoing Covid-19 Pandemic, global demand for tyres has declined sharply and is not expected to recover to pre-Covid levels until 2022 at the earliest. Nevertheless, the company was able to steadily expand sales of its Falken Wildpeak series and other high-performance tyres in the North American market under its Falken brand. The decision to invest in augmenting production capacity at its US factory is not only in response to strong sales, but also reflects the company’s great confidence in the factory, which has made enormous progress in improving productivity over the past few years, said Sumitomo Rubber. By augmenting its local production base for the North American market, the company aims to reduce sales lead times so that it may further expand sales in this key market.
In addition to increasing production capacity at its factory in the USA, the Sumitomo Rubber Group is also investing in updating production equipment at its factories in Thailand and Miyazaki (Japan) in order to shift toward increased overall production of tyres for SUVs and light trucks. With this shift, these two factories will support the company’s push to increase sales of SUV and light truck tyres in North America by producing 4,150 of these tyres per day by the end of 2023 (Thailand) and 1,600 of these tyres per day by the end of 2024 (Miyazaki). The total value of the planned investment in these two factories is JPY 10.8 billion (~ USD 102.2 million).