Grand opening of OTR tire plant is part of Yokohama's 'Grand Design'

The grand opening of Yokohama Rubber Co. Ltd.'s second OTR plant was held today in Onomichi City, Hiroshima Prefecture in Japan.

Toru Kobayashi, director and corporate officer of Yokohama Rubber, said the company plans a further increase in production capacity at the Onomichi plant to 1,650 rubber tons per month by October 2008. Construction of the new plant began in February 2006.

The new plant is designed to produce small- to middle-sized radial tires with rim diameters of 25, 33 and 35 inches for use in wheeled cranes and dump trucks of the 30- to 75-ton class.

In total, Yokohama intends to be producing 2,500 rubber tons per month at both its Onomichi plants sometime during its fiscal year 2011. That would be an increase of 127% from the current 1,100 rubber tons being produced.

At the same time, Yokohama wants to increase its Onomichi plants’ radialization percentage to 40%.

Yokohama has invested 3.5 billion yen ($35 million) in the new plant. Kobayashi said the company is planning a further 5 billion yen ($50 million) investment in future expansion at the new Onomichi plant starting later this year.

The increased capacity will be for "super-large" tires for use on 100- to 250- ton dump trucks. Further, the company plans to expand the capacity of tires for middle to large industrial vehicles in the 30- to 100-ton class, which the company says is rapidly expanding. These tires will fit port vehicles, and underground mining and dump trucks.

Kobayashi told Modern Tire Dealer that 40% of Yokohama's Onomichi OTR production is currently slated to go to the United States.

Gary Nash, director for OTR tire sales for Yokohama Tire Corp., reported to MTD earlier this year that major OTR tire manufacturers could have as many as 20,000 tires on back order each. He now says that supply has caught up somewhat, with his company currently experiencing a 12,000-tire backorder situation.

Large and extra-large tires are still very tight and make up the majority of the backorders, he adds.

Kobayashi said that Yokohama also plans to continue increasing bias OTR tire production since there continues to be high demand for these tires at open-pit and underground mines throughout the world.

The company will decide by 2010 if it will build another OTR plant outside of Japan to meet continued rising demand, Kobayashi said.

This increase is all part of Yokohama Rubber's Grand Design 100 that coincides with its 100th anniversary in 2017. The company intends to double its annual sales to $10 billion by that time.