This investment will primarily take the form of expansion in production capacity.

Between US$40 and US$50 million will be spent expanding the company’s plant in Xiamen, Fujian Province. A company spokeswoman has been quoted as saying: "We aim to double the Xiamen plant’s daily output to 4,000 tyres for heavy truck use by the end of next year or by early 2008. The Xiamen plant has become a very important base to Cheng Shin Rubber."

A further US$20 to US$30 million will be invested in the upgrading of the company’s tyre testing plant in Kunshan, Jiangsu Province, with the rest of the amount divided between production facilities in other locations.

Cheng Shin Rubber was established in Taiwan in 1967, and in the early 1990s, became one of the first Taiwanese companies to invest in China. Today, the company has four production facilities located in the mainland. Cheng Shin’s net profit in the nine months to September was US$44.8 million, up 60.4 per cent from a year earlier.