Sumitomo Rubber Industries plans on adding truck tires at Brazilian Plant

Brazil: As part of expanding their product portfolio, Japanese tire company Sumitomo Rubber Industries has planned to go ahead with inclusion of truck tires at their 3-year-old plant located in Fazenda Rio Grande, Brazil.

The company has allocated a budget of around USD96 million over a span of 4 years to add production capacity of truck tires to 500 truck tires every day when fully operational. The production is expected to start by March 2019. The company has also planned on expanding passenger cars and light truck tire capacity with a budget of USD54 million   

On successful implementation of this expansion plan, the company expects to create 600 new jobs in the Brazilian plant. It currently employs 1,217 people and has a production capacity of 15,000 passenger car and light truck tires per day. The company has decided to add truck tires in their product portfolio as a strategy to target the rising demand for radial truck tires which is growing at around 2% yearly in Brazil. The move is also anticipated to provide support to the company in terms of avoiding the effect of fluctuating currency rates which is likely to affect the import scenario in coming years.         

According to a recent report published by TechSci Research, “Brazil Tyre Market Forecast & Opportunities, 2020”, Brazil was the fourth-largest auto market across the globe after China, US and Japan in terms of sales, and ranked seventh in terms of production. Growing domestic demand for automobiles, increasing per capita income levels of consumers and availability of skilled workforce have attracted significant foreign direct investments in the country over the last decade. Major global auto manufacturers such as Fiat, Toyota, Hyundai, Volkswagen, Ford, GM, and Nissan intend to either establish a new manufacturing facility or expand their existing production facilities in Brazil, in order to address the growing tire demand in the coming years. High government focus on macroeconomic and infrastructure front is expected to significantly benefit the country’s tire market in the coming years. Few of the leading players operating in Brazilian market are Pirelli, Michelin, Bridgestone, Goodyear, Continental AG and Rinaldi.

As per TechSci Research, the decision of Sumitomo Rubber Industries to add truck tires capacity in their Brazilian plant is expected to garner support to the leading OEMs present in the country along with facilitating increase of market share of Sumitomo in Brazil tire market by expansion of product portfolio of the company.