Skip to main content
Sister Publication Links
  • European Rubber Journal
  • Plastics News
  • Tire Business
Subscribe
  • Login
  • Register
  • Subscribe
  • News
    • Rubber Division IEC
    • War in Ukraine
    • Automotive
    • Tire
    • Non-Tire
    • Suppliers
    • ITEC
    • Silicone
    • Online Exclusive
    • Latex
    • Technical Notebooks
    • Executive Action
    • Government/Legal
    • Opinion
    • Blogs
    • Sustainability
    • Products
    • Wacky World of Rubber
  • Airless Tires
  • Custom
    • Sponsored Content
    • White Papers
  • Resources
    • Directory
    • Classifieds & Mold Mart
  • Data
  • Events
    • RN Events
    • RN Livestreams/Webinars
    • Industry Events
    • Past Events
    • Rubber News M&A Live
    • Ask the Expert
    • Healthcare Elastomers Conference
    • Rubber In Automotive Conference
    • Women Breaking the Mold Networking Forum
  • Advertise
  • DIGITAL EDITION
MENU
Breadcrumb
  1. Home
  2. Financial
March 11, 2021 02:12 PM

Toyo targeting double-digit earnings growth in 5-year business plan

Tire Business Report
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print
    Toyo Tire Corp.
    Toyo has adopted 'Ignite your BLUE' as its global corporate business theme.

    HYOGO, Japan—Toyo Tire Corp. is eyeing a double-digit improvement in its consolidated operating income within the next five years, through a mix of investments in new products, manufacturing and market development.

    According to the company's mid-term business plan, covering 2021-25, Toyo's goal is to improve its operating income by 65 percent by 2025 over fiscal 2020 to nearly $555 million, while generating sales growth of over 10 percent a year versus 2020.

    Over the period, Toyo plans to make capital investments of roughly $1.75 billion in growth and equipment, according to Toyo President Takashi Shimizui, who presented the business plan to the shareholders and the investment community recently.

    Toyo published the business plan shortly after reporting its fiscal 2020 results, which revealed an operating income drop of 5.5 percent, to $343.7 million, on 8.9 percent lower sales of $3.22 billion.

    As part of the strategy, Toyo said it will target North America as a key market where it expects to generate 58 percent of total global sales by 2025, up from 57 percent currently. Over the same time period, production in the U.S. will grow to 41 percent of Toyo's global total from 38 percent in 2020.

    In a Feb. 25 presentation, Toyo said it intended to improve its ranking in North America from seventh last year to fifth by 2025 by expanding production capacity in the U.S. and increasing exports from factories in Japan and the plant under construction in Serbia.

    Under the plan, Toyo will shift production at its Japanese factories to "high-value-added products" as the key production base of the group with the aim to increase supply to the North American market. This strategy includes increased production of truck/bus tires at Toyo's plant in Kuwana, Japan, for export to the U.S.

    Toyo is projecting that its plant in Serbia—due to open in April 2022—will be its most cost-competitive production center, with manufacturing costs up to 30 percent lower than its factory in Sendai, Japan. As such, Toyo anticipates exporting 2 million tires a year from that facility to North America, while supplying 3 million units to European markets.

    Toyo's plan also includes exports to North America from Malaysia, where it's closing one of its two factories and consolidating much of the capacity at the remaining plant.

    Toyo Tire Corp.

    In addition, the business plan calls for increasing focus on research and development and introducing "differentiated products" that will have "enhanced strengths," Toyo noted.

    This initiative will draw on Toyo's advanced designing assets to meet "multiple performance requirements," developing applicable technologies for next-generation mobility such as electronic vehicles (EVs) and eco-friendly technologies.

    Furthermore, the group said it will look to optimize its logistics systems, digitize sales and introduce new technologies aimed at expanding sales networks and catering for each of its key markets.

    Toyo noted that it expects its partnership with Mitsubishi Corp. to generate upwards of $90 million in earnings improvements during the five-year stretch through reduced operating expenses and increased sales through Mitsubishi's distribution network and functions.

    Japanese conglomerate Mitsubishi and Toyo established a wide-ranging strategic partnership in 2018 designed to enhance Toyo's global distribution assets, help it compete more effectively in the evolving mobility sector and fund capacity expansions.

    As part of the partnership, Tokyo-based Mitsubishi—which has partnered with Toyo in distribution since 1974—raised its ownership stake in Toyo to 20 percent from 3.05 percent with a $452.5 million investment for the purchase of 26.9 million newly issued shares.

    Related Article
    Toyo Tire forecasting solid recovery in 2021
    Toyo to close Silverstone plant in Malaysia, phase out brand
    Toyo upgrades fiscal 2020 outlook on Q3 'rebound'
    Letter
    to the
    Editor

    Rubber News wants to hear from its readers. If you want to express your opinion on a story or issue, email your letter to Editor Bruce Meyer at [email protected].

    Most Popular
    1
    ASTM's new rCB standard intended to ensure quality
    2
    R.E. Carroll acquires Kentucky elastomer supplier
    3
    Mearthane Products stays on acquisition trail, gets new PE partner
    4
    No alternative in sight: Why Michelin is emphasizing sustainability of hevea
    5
    NR market sees slowdown in supply, demand growth rates
    SIGN UP FOR NEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Get our newsletters

    Staying current is easy with Rubber News delivered straight to your inbox, free of charge.

    Subscribe Today

    Subscribe to Rubber News to get the best coverage and leading insights in the industry.

    SUBSCRIBE
    Connect with Us
    • LinkedIn
    • Facebook
    • Twitter

    MISSION

    To serve companies in the global rubber product industry by delivering news, industry insights, opinions and technical information.

    Contact Us

    2291 Riverfront Pkwy, Suite 1000
    Cuyahoga Falls,
    OH 44221

    Customer Service:
    877-320-1726

    Resources
    • About Us
    • Digital Edition
    • Staff
    • Advertise
    • Order Reprints
    • Privacy Policy
    • Privacy Request
    • Terms of Service
    • Careers
    • Ad Choices Ad Choices
    • Sitemap
    Partner Sites
    • Tire Business
    • European Rubber Journal
    • Plastics News
    • Urethanes Technology
    • Automotive News
    • Crain Brands
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Rubber Division IEC
      • War in Ukraine
      • Automotive
      • Tire
      • Non-Tire
      • Suppliers
      • ITEC
      • Silicone
      • Online Exclusive
      • Latex
      • Technical Notebooks
      • Executive Action
      • Government/Legal
      • Opinion
      • Blogs
        • Products
        • Wacky World of Rubber
      • Sustainability
    • Airless Tires
    • Custom
      • Sponsored Content
      • White Papers
    • Resources
      • Directory
      • Classifieds & Mold Mart
    • Data
    • Events
      • RN Events
        • Healthcare Elastomers Conference
        • Rubber In Automotive Conference
        • Women Breaking the Mold Networking Forum
      • RN Livestreams/Webinars
      • Industry Events
      • Past Events
      • Rubber News M&A Live
      • Ask the Expert
    • Advertise
    • DIGITAL EDITION