OSAKA, Japan (April 12, 2011)—Toyo Tire & Rubber Co. Ltd. is buying a 75-percent stake in China's Shandong Silverstone Luhe Rubber & Tyre Co. Ltd., which it will use to supply its global operations with radial truck tires.
Toyo will acquire the stake for $21.6 million from Malaysia's Lion Rubber Industries Sdn. Bhd., which helped set up the factory in Luzhou, Shandong Province, in 2004. Toyo expects the deal to close by mid-year.
The Shandong Silverstone plant is capable of producing up to 400,000 radial truck tires a year with 500 employees, Toyo said.
The Shandong Silverstone plant will complement Toyo's passenger tire factory under construction in Jiangsu Province, the company said, allowing it to meet strong demand in rapidly expanding markets in China and elsewhere. The goal, it added, is to “establish an optimal tire supply system, not only for China, but for all of our overseas markets.”
The deal fits into the company's strategy of improving its corporate value, Toyo said.
The tire maker plans to commence production of Toyo-brand tires at the new subsidiary as soon as practicable.