Kenda to Set Up New Tire Factory in Huizhou of China

Taipei, March 13, 2012 (CENS)--Kenda Rubber Ind. Co., Ltd., a major rubber tire maker in Taiwan, recently announced that the company and more than 10 Taiwanese bicycle makers have jointly signed an investment letter of intent (LOI) with Huizhou Zhongkai (HZZK) High-tech Industrial Development Zone in Huizhou, Guangdong Province of China.

Kenda is scheduled to invest billions of NT dollars to set up a new tire factory in southern China. Construction of the new factory is expected to start as soon as possible by the end of the year, and the new facility is expected to kick off mass production in 214.

Yang Yin-ming, Kenda's chairman, pointed out that the new Huizhou plant will be similar to the firm's facility in Shenzhen (Guangdong Province), focusing on production of bicycle tires. But Kenda won’t rule out the possibility of installing passenger car radial (PCR) tire production lines at the new factory in the future.

Industry sources said that Kenda has announced a plant-expansion project in southern China for more than one year, and the company got a promise from a senior official at the (HZZK) High-tech Industrial Development Zone to ready a large land area for creating the largest bicycle-making industry zone in southern China.

Kenda's Shenzhen facility now focuses on production of powered two-wheeler (PTW), bicycle and industrial tires. About 55% of the products turned out here are for sales in China and the rest 45% are exported. The facility registered revenue of about NT$6.1 billion (US$203.3 million), profit rate of 16% and net earnings of NT$350 million (US$11.7 million) in 2011. Industry sources said that the new Huizhou factory will be much bigger than the Shenzhen one as it would be installed with PCR tire production lines to make products for exports to the Europe and the U.S. markets.