Kenda plans to manufacture truck tires within three years
Kenda Rubber Ind. Co. Ltd. produces 10 million radial consumer tires a day worldwide. A relative newcomer to the market, Kenda’s annual production pales in comparison to, say, Goodyear Tire & Rubber Co.’s output, which annually exceeds 10 million units at its Fayetteville, N.C., plant alone.
Before 2001, however, the Taiwanese company was known only for its bicycle, lawn and garden, ATV, industrial and motorcycle tires. The building of its Kunshan, China, plant changed that.
Add in capacity from its Yun Lin, Taiwan, and Tianjin, China, facilities, and Kenda can produce 35,000 passenger and light truck tires a day.
That has always been Kenda’s way: ambitious yet steady growth. Vice Chairman Chi-Jen “Jimmy” Yang says the company plans to grow even more to meet market demands. Next up: building a truck tire plant within the next three years.
Modern Tire Dealer recently sat down with Yang, who is also president of American Kenda Rubber Industrial Co. Ltd., to ask him about Kenda’s plans to add truck tires to Kenda’s lineup. American Kenda Rubber, which also does business as Kenda USA, is headquartered in Reynoldsburg, Ohio.
MTD: Over its 52-year history, Kenda has entered different markets a step at a time, starting with bicycle tires in 1962. Any plans to produce truck tires?
Yang: It has been Kenda’s intention to get into truck and bus tire manufacturing. We are always looking to continue to grow our global business by adding to our existing bread-and-butter items like bicycle tires, lawn and garden tires, trailer tires, golf cart tires, motorcycle tires and industrial tires. In 2001, we moved into the PCR and LTR business, and that has been very successful for us. So the next natural growth area for Kenda is the TBR business. Kenda has been thinking about that for the last two years, and has actively and successfully discussed the idea with the government of Kunshan, near Shanghai, in China, where Kenda has a fairly large factory. We have secured a large piece of land nearby, and are now working on all the details to get the permission to register the company. We are at the stage of doing the environmental evaluations, and working on a viability study to see how big the scope of the project should be. We hope the plant will be built and manufacturing tires within three years. When phase one is complete, the plant will have the capacity to produce 3,000 TBR tires a day. When this plant is fully operational, capacity should reach anywhere from 9,000 to 10,000 tires a day.
MTD: Will Kenda truck tires be available in the U.S. in three years?
Yang: That, too, is part of the viability study. Realistically, it is possible. We have had a good degree of interest from Kenda’s existing global customers, including customers in North America, China, the Middle East and South America. They are interested in distributing Kenda truck and bus tires. But because the initial capacity is only 3,000 a day, which is not very many, we have to determine our target market in the beginning. It makes no sense with a little capacity to try to supply globally. Everyone would probably only get a container a year. So we want to focus on the markets where we think we have the best chance to be successful.
Certainly the Chinese market will be one market that we will target. I want another market to supplement it, and it could be the Middle Eastern market or the North American market. Focusing on two markets will be sufficient early on to handle the capacity. I don’t want to spread Kenda too thin.
MTD: Will your TBR plant manufacture tires for both the replacement and original equipment markets?
Yang: Replacement only in the beginning, very similar to how our PCR program started.
MTD: It sounds like you might need a second truck tire plant down the road.
Yang: The site in Shanghai where we plan to produce TBR is only big enough for 9,000 to 10,000 tires. If Kenda grows beyond that, we would have to find a new site somewhere in the world. It could be in India, it could be in Indonesia, it could be in the United States, you never know. But right now, the game plan is to get the Kunshan plant up and running. ■
In part two of our exclusive interview with Yang, he shares insight into Kenda’s plans for radial passenger and light truck tire production, including the challenges he faces. Look for it in our September issue.