[19 Feb] MHI to Manufacture Rubber Tire Machinery in China

Mitsubishi Heavy Industries, Ltd. (MHI) is about to launch local production of rubber tire production machinery in China with the establishment of a wholly owned subsidiary, Changshu Ryoju Machinery Co., Ltd. in Changshu, Jiangsu. With the commencement of production set for this March, the company plans to complete the production plant in February. Spurred by China's rapid advances in motorization, the world's major tire manufacturers are all actively entering the Chinese market, and MHI's initiative is its strategic response to this trend.

As an affiliate of Mitsubishi Heavy Industries (China) Co., Ltd. (MHIC), the regional headquarters established in Beijing last December to oversee MHI's business in China, the new rubber tire machinery manufacturing company, which is capitalized at 450 million yen, will conduct business by securing funds from MHIC. MHI acquired a plant building with a 5,000 square meter floor space within the Changshu Southeast Economic Development Zone and has been preparing for production launch since last August, including installation of production equipment. The new company will start operations with 64 employees. Minoru Kimura of the Rubber & Tire Machinery Department, Industrial Machinery Business, Technology & Solutions Division at MHI's Machinery & Steel Structures Headquarters has been appointed General Manager.

While, initially the Chinese plant will perform manufacturing and assembly using major parts received from MHI's Industrial Machinery Business, Technology & Solutions Division in Hiroshima, the company intends to further enhance and solidify its operation base in China by establishing a supply chain through development and cultivation of local suppliers. Plans call for manufacture of 40 units in the initial business year, increasing to about 160 units within three years. In tandem with this initiative, the production base in Japan - the Industrial Machinery Business, Technology & Solutions Division - will strengthen its function as a technology development center; it will also shift production to machines for use by domestic customers, including high-end models and machines to produce tires for heavy-duty construction vehicles.

Automobile production in China reached 8.89 million units in 2007, 9.35 million in 2008, and exceeded 13.5 million in 2009.

This year, production is expected to expand to about 14 million units. Along with this rapid growth, demand for tires has also increased sharply. China's tire market is expected to be the world's largest this year, surpassing the US.

As demand for high-performance tires is also rising in China, taking opportunity of the production base establishment, MHI intends to further strengthen its vigorous business development activities of tire machinery, including advanced tire-curing machines to produce high-performance tires.