Sumitomo Electric Industries, Ltd. has agreed with Hyosung Corporation, a Korean leading manufacturer of textile tire cord, to jointly set up a new manufacturing company of steel tire cords in Thailand. Sumitomo Electric will also expand its business in China by acquiring a 30 percent stake of Hyosung's Chinese subsidiary.
Steel tire cords are a key component used in the production of automobile tires for tread reinforcement. Using base materials prepared in Japan, the Sumitomo Electric Group currently manufactures its steel tire cords in Japan and Indonesia. However, as the market has seen tire manufacturers steadily concentrating their capital in Thailand and China, the Group has been considering expanding its steel tire cord business to these two countries to strengthen its supply system and cost competitiveness.
Hyosung is a leader in the textile cord market with a strong sales network covering most major international tire manufacturers. These agreements with Hyosung will allow the Sumitomo Electric Group to set up comprehensive production lines, from raw materials to finished products, in both Thailand and China. In Thailand, the new company will be located in the city of Rayong, the center of the country's automotive industry. From here, the new company will serve as a hub for both domestic and export demand. In China, the Sumitomo Electric Group will participate in the management of Hyosung Steel Cord (Nanjing) Co., Ltd., Hyosung's wholly owned subsidiary, by acquiring a 30 percent stake to take advantage of the growing local market.
【Profile of New Company in Thailand】
（１）Company name | Sumiden Hyosung Steel Cord (Thailand) Co.,Ltd. |
（２）Business | Manufacture and sales of steel tire cords |
（３）Location | Amata City Industrial Estate, Rayong, Thailand |
（４）Capital | 1.13 billion baths (about 3 billion yen, 1 THB = about 2.7 JPY） |
（５）Investment ratio | Sumitomo Electric: 70 percent, Hyosung: 30 percent |
（６）Establishment | January 2011 (scheduled) |
（７）Start of business | January 2012 (scheduled) |
（８）Board composition | 3 board members from Sumitomo Electric, 2 members from Hyosung Corporation |
（９）Number of employees | About 400 (at the point of production of 3,000 ｔ/month ) |
（10）Sales volume | About 3,000 ｔ/month (in 2014) |
（11）Sales prospect | About 5 billion yen (in 2014) |
【Profile of Joint Company in China】
（１）Company name | Hyosung Sumiden Steel Cord (Nanjing) Co., Ltd. |
（２）Business | Manufacture and sales of steel tire cords |
（３）Location | Nanjing, People's Republic of China |
（４）Capital | 33 million US dollars (about 2.6 billion yen, 1 USD = about 80 JPY) |
（５）Investment ratio | Sumitomo Electric: 30%, Hyosung: 70 percent |
（６）Start of join business | January 2011 (scheduled) |
（７）Board composition | 2 board members from Sumitomo Electric, 3 members from Hyosung |
（８）Number of employees | About 350 (at the beginning of the joint venture) |
（９）Sales volume | About 2,000 ｔ/month (in 2011) |
（10）Sales prospect | About 4 billion yen (in 2011) |