HYOGO, Japan—Toyo Tire Corp. has decided to dissolve its Silverstone Berhad subsidiary in Malaysia and close the unit's car, truck, farm and industrial tire plant in Kamunting, Malaysia.
Toyo will transfer the 32-year-old plant's production capacity of 3 million units to its Toyo Tyre Malaysia Sdn. Bhd. subsidiary nearby and discontinue the Silverstone brand. Toyo said it expects to book a $60 million loss on the action.
Toyo bought Silverstone in 2010 and disclosed plans at that time to produce Toyo- and Nitto-brand tires at the firm's plant in Kamunting. Production is slated to stop by mid-year, Toyo said, with the dissolution of Silverstone as an entity to be completed by year-end.
Toyo opened the Toyo Tyre factory in 2013 and budgeted $187.5 million in 2017 to double capacity at the plant to nearly 10 million tires a year as part of a broader expansion plan to "strengthen the company's business foundation in order to maximize profits."
That project focused on production of large-diameter tires for pickup trucks, SUVs, and CUVs.
By phasing out the Silverstone brand, Toyo said it expects to expand sales of Toyo-brand tires by utilizing the Silverstone sales channels and network.
Annual sales attributed to Silverstone have declined steadily over the past three years, Toyo data show, and the unit has been in the red as well.