Manufactured Capital
Manufactured Capital (production infrastructure, capital expenditures)
In fiscal 2021, the Sumitomo Rubber Group supplied 116.03 million tires to markets around the world. To support the global marketing of tires, we have secured four production bases in Japan and eight production bases in countries abroad, thereby developing an optimal production system encompassing a broad swath of regions. Today, the ratio of overseas production volume amounts to 63%. Although the utilization ratio of these production bases dropped significantly from 92% in fiscal 2019 to 76% in fiscal 2020 due to the COVID-19 pandemic, this ratio recovered to 88% in fiscal 2021. For fiscal 2022, we expect the utilization ratio of our bases to increase to 95%.
Our initial budget for capital expenditure in fiscal 2021 was ¥59.0 billion. However, in the face of stagnation in automobile production due to shortages of semiconductors and automotive parts, we resized this budget to ¥49.5 billion (of this, ¥28.4 billion was allocated to overseas facilities).
For fiscal 2022, our plans call for capital expenditure amounting to ¥70.0 billion, including ¥48.6 billion for overseas facilities.
The Group, which is expanding its business globally, possesses six domestic bases and 16 overseas bases in its production network.
In fiscal 2021, we implemented a total of ¥49.5 billion in capital expenditures.
Global Network
OVERSEAS
- Indonesia Factory (tires and sports goods)
- Changshu Factory (China) (tires)
- Hunan Factory (China) (tires)
- Thailand Factory (tires)
- Brazil Factory (tires)
- South Africa Factory (tires)
- Turkey Factory (tires)
- USA Factory (tires)
- Thailand Factory (sports goods)
- Philippines Factory (sports goods)
- USA Factory (sports goods)
- Malaysia Factory (industrial products)
- Zhongshan Factory (China) (industrial products)
- Vietnam Factory (industrial products)
- Switzerland Factory (industrial products)
- Slovenia Factory (industrial products)
JAPAN
Capital Expenditures
In the current consolidated fiscal year, the Company has thus far made capital expenditures of \49,548 million, of which \45,873 million has been used in the tire business for the renewal of domestic plants that are shifting production to high-performance products and the expansion of investment in increased production at overseas plants, \1,858 million in the sports business mainly for the development and construction of sales systems at overseas bases, and \1,817 million in the industrial products and others business, mainly at overseas plants. The necessary funds have mainly been appropriated from own funds and borrowings.
There are no plans for the disposal of major facilities in the current consolidated fiscal year.
For further information on capital expenditures, please see below.
A Message from the Executive Director in Charge of Finance (PDF 201KB)Capital Expenditures
*IFRS 16 (Lease) impact is not included from 2019.
Production Infrastructure
Tire Business
Establishing a globally optimized production infrastructure
The development of the Tire Business’s global production infrastructure began in 1997 with the Indonesia Factory, and the number of production bases continued to expand steadily with the opening of the Changshu Factory in China in 2004, the Thailand Factory in 2006 and the Hunan Factory in China in 2012. To further strengthen the supply infrastructure, we are currently moving forward with plans to extend the Thailand Factory into one of the largest of its kind in the world. In addition, we are moving steadily ahead with the expansion and enhancement of other production facilities, having, for example, launched production at the Brazil Factory and South Africa Factory in 2013 as well as at the Turkey Factory in 2015 and having acquired a factory in New York state to serve as the Group’s U.S. base.
Reinforcing Our Global Business Framework
One of the main strengths of our Tire Business is the solid foundations that we have built for our business in Japan, China and the rest of Asia, where we have developed close relationships of trust with automobile manufacturers to expand sales of OE tires, which, in turn, produces a strong pull effect to ensure steady sales of replacement tires as well. The Sumitomo Rubber Group is now in the process of taking this model for success and expanding it on a global scale.
Our group already possesses manufacturing, sales and service bases that are positioned to serve major markets worldwide, while our “Trilateral R&D Network” (with bases in Japan, North America and Europe) enables us to develop products that are tailored to the characteristics of each market. At the same time, while pushing ahead with the transition to local production for local consumption, we have established a flexible global supply network that allows us to supply tires from our factories in Asia to wherever they are needed. The Sumitomo Rubber Group is now in the process of reinforcing the foundations of our business in each market, supported by these three key pillars of our Global Business Framework.
Meanwhile, with an eye toward future sales, we are now in the process of increasing production capacity and updating equipment at our factories in the United States, Brazil, Thailand, Japan and Turkey with a particular focus on larger tire sizes and other Advanced Tires.
Sports Business
Proving ourselves worthy of the trust of users through superior production technology and the ingenuity of our employees
The Company began the domestic manufacture of golf balls and tennis balls in 1930. Golf balls, such as SRIXON and XXIO, constitute a mainstay of the Sports Business, and are currently manufactured at the Ichijima Factory (Tamba City, Hyogo Prefecture) and the Indonesia Factory. In addition to golf clubs, manufacturing subsidiary Dunlop Golf Club Corp. (Miyakonojo City, Miyazaki Prefecture) produces custom clubs to meet the needs of a wide variety of customers.
In tennis, our tennis ball factories in the Philippines and Thailand manufacture balls for the Australian Open, one of the four Grand Slam tournaments, as well as for major events on the ATP Tour.
Industrial and Other Products Business
Raising the production capacity of the Rubber Parts for Medical Applications Business
In the growing Rubber Parts for Medical Applications Business, since commencing the production of rubber parts for medical applications at the Izumiotsu Factory in 2000, we have continued to expand, adding the Kakogawa Factory in 2010, the Swiss Factory in 2015, and the Slovenia Factory in 2017, deploying a global production system.