Tokai Rubber changes name to Sumitomo Riko in push for overseas growth
TOKYO -- Tokai Rubber Industries Inc., a supplier of rubber anti-vibration parts and hoses, will change its name to Sumitomo Riko Co. to better leverage brand recognition from its being a part of Japan’s Sumitomo Group.
The change will give Tokai Rubber a higher profile as it expands internationally and into new business segments, the Japanese company said. The change was approved today at the company’s annual shareholders meeting and will take effect Oct. 1.
The new moniker combines the “trustworthy global brand” of Sumitomo with “Riko,” a Japanese word for the sciences of physics, chemistry and engineering, the company said.
The move comes as Japanese suppliers ramp up overseas expansion plans. Vehicle sales in Japan have stagnated along with the nation’s population. Japanese automakers are scaling back at home and setting up assembly plants overseas.
For suppliers, deeper international reach is critical as Japanese automakers increasingly seek big suppliers capable of huge single-part volumes to satisfy more modularized vehicle designs.
Tokai Rubber was founded as Kamata Chotai Co. in 1929. Its name changed to Tokai Rubber in 1937, when Sumitomo Electric Wire & Cable Works bought into the company. Today, Sumitomo Electric Industries Ltd. owns 51 percent of Tokai Rubber.
Tokai Rubber says that through its subsidiaries in 24 countries, it holds the largest market share of automotive anti-vibration products among its peers. Automotive products account for nearly 80 percent of sales.
Business in Japan generates about 61 percent of the company’s sales. North America is Tokai Rubber’s next-biggest market, accounting for 17 percent of annual sales.
Plan for growth
In automotive products, Tokai Rubber has broadened its global footprint through acquisitions, growing to 74 sites in 24 countries.
Branding with Sumitomo may help the company tap business with overseas customers who recognize the longtime Japanese conglomerate but might be unfamiliar with Tokai Rubber.
Under its current business plan, the company aims to boost global annual sales to 1 trillion yen ($9.76 billion) in the early 2020s, from 272.5 billion yen ($2.66 billion) in 2010. Part of that strategy involves diversifying into new sectors, including housing, energy management and medical care.