Kenda to Set Up Passenger Car Radial Tire Plant in Central Taiwan

Taipei, March 16, 2011 (CENS)--Kenda Rubber Ind. Co., Ltd., a major tire maker in Taiwan, recently announced plans to invest NT$10 billion (US$333.3 million) to set up a plant to make passenger car radial (PCR) tires on the island.

Yang Ying-ming, the chairman, already signed an investment memorandum of understanding (MOU) with Cho Po-yuan, magistrate of Changhua County, adding that the new plant will be built in phases, the first of which will turn out daily some 25,000 PCR tires and employ some 1,500 employees. Tires from the plant will be exported and sold locally.

Kenda's current revenue is generated by output consisting of 75% bicycle and powered two-wheeler (PTW) tires, 25% PCR tires and has been trying to increase PCR-tire production to tap the segment's higher potential.

Yang says that investing in the new plant is based on the recovering economy in Europe and the U.S., as well as the American government's decision to levy a 30% duty on tires imported from China. The chairman is very optimistic about this year's global tire market due to the increasingly favorable market and falling rubber prices.

Some institutional investors say that Kenda's operation in China has been generating some 70% of the company's profits, making the new PCR project a move in the right direction in the long-term.