Toyo completes Chinese acquisition, renames company

ERJ staff report (TB)

Osaka, Japan -- Toyo Tire & Rubber Co. Ltd. has completed its acquisition of a 75-percent equity interest in Shandong Silverstone Luhe Rubber & Tyre Co. Ltd. for $21.5 million and changed the unit's name to Toyo Tire (Zhucheng) Co. Ltd.

Toyo said the deal's impact on its consolidated results for the fiscal year ending March 31, 2012, will be minimal.

Malaysia's Lion Rubber Industries Sdn. Bhd. was the sole owner of Shandong Silverstone Luhe prior to the sale. Toyo also bought Malaysian tyre maker Silverstone Sdn. Bhd. from Lion Rubber Industries in December 2010.

Shandong Silverstone Luhe reported sales of $58.7 million in fiscal 2010, according to Toyo, but was $5.4 million in the red on an operating and net basis. Toyo's accounts show the company suffered sales drops in 2009 and 2010 and has been operating in the red since at least 2008.

This acquisition will allow Toyo to supply truck and bus tyres while it's counting on a factory under construction in Jiangsu province for passenger tyres. Together, these plants will enable Toyo to meet strong demand in rapidly expanding markets in China and elsewhere, the company said earlier.

The company said it plans to commence production of Toyo-brand tyres at the plant in Zhucheng River Industrial Park, Shandong Province, as soon as practicable.

Shandong Silverstone Luhe was established in 2004.

From Tire Business (A Crain publication)

Press release from Toyo Tire