OSAKA — Sumitomo Rubber Industries will ramp up production capacity at its South African factory in a 1.1 billion rand ($100 million) investment, having identified long-term potential in the region.
The Japanese tire maker officially opened the new head office of Sumitomo Rubber South Africa last week and announced its plans for the investment. The factory to be expanded is in the southeastern province of KwaZulu-Natal. Sumitomo Rubber bought the factory from Indian peer Apollo Tyres in December 2013, and the 310,000-sq.-meter site has room for more facilities.
Production output is currently 9,600 tires a day. The company will first boost daily output to 12,200 tires in 2016, and eventually to 14,500 tires in 2017, 50% more than the 2013 rate. It will also produce tires for sport utility vehicles, which are popular locally.
The company will export tires from the factory to all of Africa under the Dunlop brand. It hopes to increase tire sales in Africa to 34 billion yen in 2015 and 57 billion yen in 2020.
Sumitomo Rubber holds the world’s fifth-largest market share in tires. It plans to raise the portion of sales generated in developing countries to 14% in 2015, from 11% in 2013. Last year, the company opened a factory in Brazil. In Turkey, it is building a 40 billion yen joint venture factory set to open next summer. It is planning facilities in Russia and India as well.