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Cheng Shin Reports Highest Margin Among Global Top-10 Tire Makers in 2012

2013/12/09 | By Quincy Liang

Cheng Shin Rubber Ind. Co. Ltd., a major rubber tire maker in Taiwan and globally, recently reported net margin of 12.26% in 2012, the highest among the global top-10s, including No.1 Bridgestone's 5.55% and Michelin's 7.32%.

The tire maker anticipates even-better margin for 2013, and says that it will continue to expand production capacities. Cheng Shin just announced plans to invest NT$2.36 billion (US$78.7 million) to set up a tire factory in Indonesia, which is to be Cheng Shin's third tire factory in Southeast Asia, besides the ones Vietnam and Thailand. The planned Indonesian factory is to kick off mass production as early as the second half of 2015.

The Taiwanese tire maker's planned investment in the Association of Southeast Asian Nations (ASEAN) market has drawn intensive attention from major international players already operating production in Indonesia, including Kumho and Hankook of South Korea, Pirelli of Italy, and local company Giti, industry sources said.

In addition to Vietnam, Thailand, and Indonesia, Cheng Shin also operates several factories in Taiwan, and China.

With production facilities all in Asia, Cheng Shin claims to own strong advantage in production costs, as well as marketing own-brands including Maxxis, CST, Sakura etc. to leverage different marketing advantages for higher profit margins.

To upgrade profitability, Cheng Shin has been aggressively adjusting product mix. In the first three quarters of 2013, the sales ratio of the group's aftermarket (AM) tires has risen to 76.2%, while the ratio exceeds 90% at its factories in Chongqing (Sichuan Province) and Xiamen (Fujian Province) of China, Taiwan, and Thailand.