Sumitomo announces joint venture plant in Turkey
Sumitomo Rubber Industries Ltd. is establishing a new joint venture company in Turkey to expand and develop its global tire business with a new, strategically located consumer tire plant.
The new company will serve as a strategic base for both production and sales of tires bound for the Middle East, North Africa and Russia -- where the company says it anticipates "continued market growth" -- as well as Europe.
"Sumitomo Rubber Group is expecting a significant increase in tire sales in emerging markets, such as the Middle East, North Africa, and Russia, and we believe that supplying tires 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.
"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 tires in the Turkish market."
Sumitomo signed the joint venture agreement with Abdulkadir Özcan Otomotiv Lastik on Sept. 21, 2012. The plant is scheduled to begin production by July of 2015. Here are some of the specifics:
Location: Cankiri, Turkey.
Capital: $30 million (initially).
Total investment: approximately $500 million.
Investment ratio: Sumitomo 80%, Abdulkadir Özcan Otomotiv Lastik 20%.
Main business: production and sale of radial passenger and light truck tires.
Production capacity: 30,000 tires per day (by the end of 2019).
No. of employees: approximately 2,000 (by the end of 2019).
Abdulkadir Özcan Otomotiv Lastik, a tire manufacturer based in Ankara, Turkey, has annual sales of close to $444 million. It produces and sells both tires and retreaded tires.
Earlier this year, Sumitomo broke ground on a plant in Brazil.