China: Toyo Tire to acquire 75 percent of Shandong Silverstone

by Colin Whitbread from   2011-04-13

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Toyo Tire & Rubber has announced that it is to acquire a 75 percent equity interest in the China-based tire manufacturer Shandong Silverstone Luhe Rubber & Tire (SSLRT). The acquisition price is $21.59 million and the deal is expected to conclude in early June 2011.

SSLRT is based in the Luzhou Zhucheng River Industrial Park, Shandong Province, and has capacity for the manufacture of 400,000 tires annually. Malaysia-based Lion Rubber Industries currently holds 100 percent of the outstanding shares of SSLRT.

SSLRT reported revenue of ¥398.045 million ($60.8 million) in 2010, with operating and net earnings of ¥36.749 million and ¥36.754 million respectively.

Toyo noted that through the acquisition, it will be in a position to supply truck and bus tires from SSLRT, and passenger car tires from its own new factory which is under construction in Jiangsu Province (Toyo Tires Zhangjiagang). This will enable it to meet strong demand in the rapidly expanding market in China and elsewhere.

The company plans to commence production of Toyo tires at the new subsidiary as soon as practicable, the goal being to establish what it describes as "an optimal tire supply system, not only for China, but for all of our overseas markets."

Toyo stated it is currently assessing the impact, if any, that the acquisition may have on its business results for the fiscal year ending March 31, 2012.

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