Another Chinese plant for Cheng Shin?
Taiwanese tyre maker Cheng Shin Rubber is reported to be considering building its seventh plant in China. On 19 June the Taipei Times printed comments made to this effect by company vice-president Wu Hsuan-miao (吳軒妙) following Cheng Shin’s annual general meeting the previous day.
“We will come up with a concrete plan on the construction of a new plant early next year, when the global demand for tyres is set to stabilise,” Wu told the Taipei Times. He added that Cheng Shin, which manufactures the Maxxis, CST, Sakura and Presa brands, needs to expand its production capacity as its existing plants are expected to be running at full capacity by the end of 2013. Overall current capacity is 90 per cent.
In a report issued to shareholders, Cheng Shin also said it anticipates a year-on-year rise in revenue due to increasing emerging market vehicle sales and lower raw material costs. “Demand in China and other emerging markets, such as India and Indonesia, is growing faster than in developed countries,” stated the report. And sales to Europe and North America are said to only account for nine per cent of Cheng Shin’s total sales, leaving it much less exposed to regional weakness than many of its rivals. Wu Hsuan-miao estimates the company’s combined sales to China and other emerging markets to be between 70 and 80 per cent of the total revenue in the January to March quarter.