Sumitomo Turkish JV to serve Europe, growing emerging markets
Sumitomo Rubber Industries has confirmed reports made by Japanese and Turkish media regarding a new joint venture company in Turkey. The Japanese firm says it will hold 80 per cent equity in a joint venture with Abdulkadir Özcan Otomotiv Lastik. An agreement was signed between the two companies on 21 September, and the yet to be named operation will be established next month. Sumitomo Rubber reports that the joint venture is being set up with initial capital of US$30 million and will involve a total investment of around $500 million. This sum will cover the cost of building a greenfield passenger car and light commercial vehicle tyre factory in Çankiri, Turkey.
Production at the Çankiri plant is scheduled to get underway in July 2015 and daily capacity should reach 30,000 tyres by the end of 2019; at this date the joint venture operation is expected to have approximately 2,000 employees. Sumitomo Rubber says the company is being set up as part of its “efforts to expand and develop our global tyre business,” and it will “serve as a strategic base for both production and sales of tyres bound for the Middle East, North Africa and Russia, where we anticipate continued market growth, as well as for markets in Europe.”
Sumitomo Rubber says it expects tyre sales to significantly increase in emerging markets such as the Middle East, North Africa and Russia. “We believe that supplying tyres from Turkey, which is nearer to these markets in addition to Europe, will enable us to reap enormous benefits in terms of lead times and transportation costs,” the tyre maker said in a statement. “In addition, with Japanese-owned automobile makers also expected to increase production in Turkey, we can also look forward to increased sales of both OE and replacement tyres in the Turkish market.”
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