Sumitomo Rubber Industries Ltd. has announced plans to establish a subsidiary in Brazil. The company plans to invest approximately 560 million real ($342 million) in the project.
"The auto industry in Brazil and other countries in Central and South America is rapidly expanding under the steadily growing economies of the area," says the company. "The demand for automotive tires is becoming strong as well.
"Although Brazil is the largest tire market in the area, the high customs duty and transportation costs are disadvantages to foreign tire manufacturers. Sumitomo Rubber considers that establishment of a production base in the country is necessary and has decided to establish its first tire producing and selling subsidiary in Brazil."
The name of the planned radial passenger tire plant and sales subsidiary is Sumitomo Rubber do Brasil Ltda. It will be located in Fazenda Rio Grande City, Parana State, and have a production capacity of 15,000 tires a day.
Sumitomo adds that it hopes to begin production in October 2013.