Tire Maker Cheng Shin to Build New Factory in Chongqing, China

Taipei, Nov. 25, 2009 (CENS)--Cheng Shin Rubber Ind. Co. Ltd., a major tire manufacturer in Taiwan, recently announced to invest US$30 million to build a new factory in Chongqing, Sichuan Province in China.

The new facility would first focus on producing passenger car radial (PCR) tires for sale in China initially. Some local industry sources said that Cheng Shin's move is expected to raise its share of the big Great West segment in China, and be better prepared to tap automaker Changan Group's parts supply chain.

After restructuring, Changan Group has become the third-largest carmaker in China with total annual production volume of about 2.2 million vehicles.

Cheng Shin's vice president and spokesman H.M. Wu pointed out that the capital for the new facility in Chongqing will be fully raised in the second quarter of 2010, without revealing more details.

Cheng Shin originally held a 77.64% stake in its Chinese subsidiary China Cheng Shin-Toyo Tire & Rubber (China) Co. Ltd. According to Cheng Shin, Cheng Shin-Toyo registered accumulated revenue of NT$13 billion (US$400 million at US$1: NT$32.5) in the first nine months, making it the second-most profitable affiliate of Cheng Shin Group during the period, trailing only Cheng Shin Rubber (Xiamen) Ind., Ltd.'s NT$17.6 billion (US$541.5 million).

Industry insiders believe that Cheng Shin's new plant would accelerate the tire maker's deployment in the Great West China market, especially when the maker already has plants handling Northern and Southern China.