Yokohama forecasts 12% increase in 2017 Operating Profits.
Yokohama Rubber Co Ltd, Japan’s third-biggest tyre maker, on Monday forecast a 12 percent increase in 2017 operating profit despite soaring prices of natural rubber and other raw materials.
Asia benchmark rubber futures on the Tokyo Commodity Exchange (TOCOM) hit their highest in more than five years late last month, boosted by Chinese speculators.
The world’s eighth-biggest tyre maker predicts operating profit will grow by 12 percent in 2017 to 47.5 billion yen ($419.87 million).
Still, “higher prices of natural rubber and other raw materials will reduce our operating profit by 24 billion yen ($212 million) in 2017,” said Gota Matsuo, general manager at Yokohama Rubber, told a news conference.
To minimize the impact, the firm plans to pass on the higher material costs to its customers by raising product prices and raising sales of tyres used in agricultural machines and industrial vehicles.
The company plans to increase tyre prices by up to 7 percent from April in the U.S. market.
Asked whether it will also raise prices in Japan, Matsuo said: “We’ll carefully make decisions while observing how our competitors react.”