Cheng Shin Tweaks Supply to Tap China's Simmering Automotive Market
2014/05/05 | By Steve ChuangTapping the simmering Chinese market for cars, Taiwan-based Cheng Shin Rubber Industry Co., Ltd., a top-10 tire supplier globally by revenue, has just adjusted sales structure by ramping up supply to the country.
According to Cheng Shin, all the firm's plants in China, including those in Zhangzhou, Chongqing, Tianjin and Xiamen, are channeling their output to the domestic market, a move expected to raise its overall profits in the long run, given that the country is the world's largest automotive market where local demand has turned increasingly strong after a low season.
Cheng Shin's sales in Greater China have steadily increased to make up 60% of the total so far, with those in the Asia Pacific and America contributing 12% each. This shows that China is absolutely the firm's most important overseas market among others, including Europe, whose sales command only a 5% share of the total.
Last year, the company reported consolidated revenue of NT$133.087 billion (US$4.462 billion) and net profits of NT$18.549 billion (US$618.3 million), up 2.18% and 16.45%, respectively, compared to NT$130.242 billion (US$4.3414 billion) and NT$15.928 billion (US$530.93) in 2012. Notable is that the firm's plant for car tires in Kunshan in China is the world's largest by output currently.
To expand its global market share, Cheng Shin is preparing the construction of a plant in Indonesia with NT$2.361 billion (US$78.7 million) in investment, partly for acquiring 27 hectares of land in the Suryacipta industrial estate 50 kilometers east of Jakarta that was approved by the board last October. This plant will be the Taiwanese tire maker's third in Southeast Asia after those in Vietnam and Thailand, where daily output now exceeds 26,000 and 30,000 units, respectively. (SC)
| Cheng Shin's Earnings | |||
| Year
| 2012
| 2013
| Year-on-Year Growth Rate
|
| Consolidated Revenue
| NT$130.242 Bn.
| NT$133.087 Bn.
| 2.18%
|
| Net Profits
| NT$15.928 Bn.
| NT$18.549 Bn.
| 16.45%
|
| Earnings per Share
| NT$4.91
| NT$5.72
| 16.49%
|