Chinese J/Vs terminated
27.08.2009
OSAKA, JAPAN - August 27, 2009 - Toyo Tire & Rubber Co., Ltd. (President and CEO: Kenji Nakakura) hereby announces that, at a Board of Directors' meeting held today, it resolved to terminate its joint venture agreements regarding tire manufacturing in China.
1.Rationale for the termination
In response to increasing tire demands in accordance with the rapid progress of motorization in the Chinese market, the Company determined to construct a wholly-owned new tire plant in China. In addition to this, it agreed to terminate the joint venture in China and to switch to a consignment manufacturing, having achieved adequate results regarding the original business target.
2.Substance of the termination
(1)Termination of Agreement with Cheng Shin Rubber Ind. Co., Ltd. (Taiwan) whose subsidiary company, Cheng Shin-Toyo Tire & Rubber (China) Co., Ltd. manufacture tires and tubes for automobiles in China.
Overview of the Cheng Shin-Toyo Tire & Rubber (China) Co., Ltd.
Location: East Chaoyang Road, Kunshan Jiangsu, China
Representative: President Robert Lo
Business Description: Manufacturing and sales of radial tires and other rubber products for automobiles
Capital: US$ 195 million
Date of Contract: December 23, 1995
Ratio of Capital Contribution: TOYO TIRES 22.4%
Cheng Shin Rubber Ind. Co., Ltd.77.6%
(2)Termination of Agreement among Maxxis International Co., Ltd. (Cayman Islands, UK) and others whose subsidiary company, Cheng Shin-Toyo Tire (Xiamen) Co., Ltd. mainly manufacture radial tires for trucks and buses.
Overview of Cheng Shin-Toyo Tire (Xiamen) Co., Ltd.
Location: No.15 Xiyuan Road, Haicang District, Xiamen, China
Representative: Chairman Sam. S.H. Chen
Business Description: Manufacturing and sales of radial tires and other rubber products for automobiles
Capital: US$ 100 million
Date of Contract: August 15, 2002
Ratio of Capital Contribution: TOYO TIRES 21.4%
Maxxis International Co., Ltd. and others 78.6%
3.Date of the termination
The termination of the joint venture should be on the contract date (August 27, 2009). The termination is to take effect on this date subject to obtaining approval from the Chinese government.
4.Forecast
Tires manufactured in the joint venture will continue to be delivered under a consignment manufacturing agreement in the future. The Company's sales activities will not be affected by this action. A statement on the impact of this action on business performance for the first-half and full-year will be announced once revised figures have been prepared.
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