YHI's sister firm to double tyre output in China
TANG WENG FAI
LISTED automotive products distributor YHI International Ltd yesterday said its sister company, Hangzhou Yokohama Tire Company Ltd (HYTC), planned to double its current tire production capacity to 1.4 million units by next year.
HYTC is a joint venture between YHI Holdings, the parent of YHI International, Japan's Yokohama Rubber Company and Hangzhou Rubber (Group) Co. YHI Holdings holds a 10 per cent stake in HYTC.
HYTC will start building a second phase of its current factory this month in Hangzhou, which expected to occupy an 80,000 square metre area by end-2004 when completed.
'We are extremely delighted with the opening of the HYTC which was on schedule and within budget. This marks a significant milestone which further strengthens our long term relationship with Yokohama,' says Richard Tay, YHI's managing director.
YHI itself plans to build a 1,200-retailer network in China's Yangtze Delta by end 2005, in line with the robust expansion of the Chinese automotive market.
YHI will also start its fifth production line for alloy wheel rims in China by the first half of 2004, through YHI's existing network of 148 distributors in China. YHI's chrome wheel production will also be advanced from Q105 to the first half of next year, to cater to the robust demand.
The Yokohama Rubber Company also plans to expand its retail network by almost 17 times. It will set up 200 stores by end-2006, in addition to the 12 stores it now runs in China.
YHI will have distribution rights for all Yokohama-branded tyres in China and expects the move to have a positive impact on earnings in fiscal year 2005.
'Driven by an increasingly affluent domestic population and the growing investment by major automotive giants in China, the automotive industry is expected to become one of the largest in the world. In view of this robust automotive growth, we have brought forward our expansion plans to meet the strong demand for tyres in China's domestic market,' said Yasuo Tominaga, president of the Yokohama Rubber Company.
The Business Times