WHITE, Ga.—Toyo Tire North America Inc. is finished building its $150 million passenger and light truck tire plant in White and plans to begin trial production by year-end.
Commercial scale production should begin on schedule by mid-2006. The factory will have the capacity to make 2 million tires annually.
The facility will be an integral part of parent Toyo Tire & Rubber Co. Ltd.´s plan to expand annual tire production capacity nearly 18 percent to 30 million units worldwide. The Japanese company wants to boost annual tire division sales and operating income by about 30 and 40 percent, respectively, by 2008.
The U.S. plant will produce Proxes S/T high-performance tires and Open Country M/T and A/T light truck tires, primarily for dealers in the eastern half of the U.S., according to Travis Roffler, senior director of marketing for Cypress, Calif.-based Toyo Tire (U.S.A.) Corp. He said Toyo is selling every tire it can make.
Because of Toyo´s new Automated Tire Operation Module manufacturing system, the 1.03 million-sq.-ft. Georgia facility will need only one-third the labor force—about 350 at startup—a comparable production facility typically employs, Roffler said.
Besides the savings in labor expenses, ATOM will help the company reduce the transportation and shipping costs associated with exporting tires to North America from Japan. Roffler said it spends more on shipping than labor because it imports mostly tires with larger rim diameters into North America. Such tires take up more container space than in the past.
The rise in shipping expenditures also takes into account rising ocean freight costs. Toyo believes labor rates in China eventually will increase, mitigating any production savings from building a plant in that country, Roffler said.
Second- and third-stage expansions at the White factory could push capacity to 6 million units and employment to 900 eventually and involve an additional $250 million investment, Toyo said. About 40 percent of the site´s floor space will be warehousing.
Toyo officials have scheduled a Dec. 8 grand opening and ribbon-cutting celebration for the Toyo Tire subsidiary´s facility.
Osaka, Japan-based Toyo Tire reported North American sales of $617.1 million during the year ended March 31, a 22.7-percent increase over the previous year. In the three months ended June 30, sales in North America were $183.5 million, roughly 20 percent ahead of the fiscal 2005 pace on an annualized basis.
Sigmund J. Mikolajczyk, Tire Business staff, contributed to this report.