TOKYO—Kobe Steel Ltd. will open a company in China next month to sell tire and rubber machinery and provide after-sales service, the company said in a March 22 release.
Called Kobelco Machinery System Engineering Qingdao Co. Ltd (KMQ), the new company will be based in Qingdao, China.
Kobe Steel has invested $360,000 in KMQ, which will supply rubber mixers, twin screw roller head extruders and tire testing machines used in the manufacture of tires and other rubber products.
World tire production has been increasing more than 3 percent annually in recent years, with China making up a nearly 40 percent share, the company said citing figures from the Japan Automobile Tyre Manufacturers Association.
Tire production in China is forecast to grow from 520 million units in 2015 to about 650 million units in 2020, the company added.
Kobe Steel said it had supplied more than 250 units of tire and rubber machinery to China to date and that the need for after-sales service is also high.
The establishment of KMQ is part of Kobe Steel's plans to gain a 50-percent share of the world market for rubber mixers.
Kobe Steel's Machinery Business posted sales of about $1.3 billion for its fiscal year ended March 31, 2015. Of that, revenue for tire and rubber equipment accounted for an estimated $285 million, according to data compiled by European Rubber Journal, a sister publication of Rubber & Plastics News. Kobe said it hopes to boost the tire/rubber portion by about $9 million a year by fiscal 2020.
The company's tire and rubber machinery business currently has manufacturing and sales bases in four locations—Japan, the U.S., China and India.