Toyo Tire & Rubber Co. said Friday it has agreed to take a 20 percent stake in a Chinese joint venture involved in the manufacture of radial tires for trucks and buses.
Cheng Shin-Petrel Tire (Xiamen) Co., capitalized at $50 million, is now owned 90 percent by Maxxis International Co. and 10 percent by Xiamen Petrel Industrial Co.
Toyo Tire & Rubber said it will purchase the stake from Cheng Shin-Petrel Tire for $10 million.
The joint venture will be renamed CSTP Tire (Xiamen) Co. after Toyo Tire & Rubber completes the deal, the Japanese tire maker said.
In late September, the joint venture will begin building a plant that will produce radial tires for trucks and buses. It is scheduled to be completed by the end of July, Toyo Tire & Rubber said.
CSTP Tire plans to produce 300,000 radial tires in 2004, rising to 750,000 tires in 2006.
The joint firm started production of tires for cars, light trucks, construction machines, and bicycles in April, but such production will be gradually decreased after the new plant begins operations.
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