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.