Toyo says on target with five-year growth plan

Tokyo – Japanese tire group Toyo Tire Corp. has progressed its five-year growth strategy “Mid-Term ’21 plan” despite the headwinds posed by the Ukraine-Russia war and supply disruption.

In its 2021 annual report, published 30 Sept, the Tokyo-based group said it was on track with the plan, having posted a consolidated operating margin pf 13.5% and consolidated operating income of Yen53 billion (€360 million).

The results, said Toyo, are the group’s second highest on record.

Over the five-year period, Toyo aims to increase operating margin to 14% and operating income to Yen60 billion.

During the course of 2021, Toyo said it prioritised the supply of large-diameter tires, a priority product in the key North American market, and managed to transfer the impact of soaring raw materials prices to product prices.

This, it said, enabled the group to exceed the prior year’s performance in the region.

Toyo went on to explain that it aims to increase the ratio of ‘priority products’, such as large-diameter tires, from 53% of the mix in 2021 to 55% by 2025.

In North America, the mix ratio reached 60% for 2021, exceeding the region’s target of 58% over the five years.

This, Toyo said, was achieved by prioritising the supply of the products to meet strong demand in the region.

On the group’s outlook over the five years, Toyo said demand had recovered sharply post-Covid pandemic.

However, it noted that the war in Ukraine posed geopolitical risks while costs for raw materials and ocean freight rates are likely to remain high.

“Despite these circumstances, we will achieve the goals set forth in the mid-term plan,” said Toyo.

This, Toyo said, will be achieved by ramping up the recently opened plant in Serbia to full capacity, in addition to other measures to further improve efficiency.

The measures, it noted, include upgrading systems to increase production capacity at its manufacturing facility Bartow County, Georgia, and closing the aging Silverstone Berhad in Malaysia.

Furthermore, Toyo said it aimed to invest a total of Yen194.0 billion in capital expenditure over the five years of the plan.

The investments will go towards the maintenance and renewal of property, plant and equipment as well as growth, said Toyo.

“We plan to steadily implement forward-looking investments in areas such as digital transformation (DX) to strengthen infrastructure, improve operational efficiency, and enable data driven management, as well as renovate our aging plants in Japan,” the group concluded.