Dunlop Aircraft to Expand With New Retreading Facility in China

Birmingham-based Dunlop Aircraft Tyres has signed a Memorandum of Understanding with Hong Kong Aircraft Engineering Company Limited (HAECO) and Taikoo (Xiamen) Aircraft Engineering Company Limited (TAECO) to establish a tyre retreading facility in Jinjiang, Fujian Province, China. It is intended that a joint venture will be formed with Dunlop Aircraft Tyres as the majority partner and the new facility to be operational in early 2009.

The new follows AAC Capital Partners’ (formerly the private equity business of ABN Amro) acquisition of 74.6 per cent of Dunlop Aircraft Tyres in May this year. The most recent announcement shows that predictions that the expansion in China would come to fruition 12 – 18 months after the sale are right on track. However, at the time of the sale of 74.6 per cent of Dunlop Aircraft Tyres in May, there were also suggestions of expansion in the US. No mention of the progress of these plans has yet been made.

Dunlop Aircraft Tyres currently has an integrated new tyre manufacturing and retreading facility in Birmingham, UK. Penetration of the Asian market has been restricted to date as retreading from Europe is uneconomic for airlines located in the Asia Pacific rim region.

“Commercial aviation is expanding rapidly across Asia, and aircraft manufacturers have recently increased their forecast of jet airliner deliveries because of the pace of growth across the region,” said Dunlop Aircraft Tyres’ chairman, Ian Edmondson.

“The investment in this new facility will enable us to fully capitalise on our strong brand recognition and acceptance in the region by supporting airlines with a complete new tyre and retread service.

“We are also excited about the opportunity of working with HAECO, one of the world’s leading aircraft engineering companies. The company has a strong reputation and we are delighted to be partnering with them on this initiative.”

“HAECO already has a number of joint ventures in place with other leading companies in the aerospace market,” said P.K. Chan, deputy chairman & chief executive officer of HAECO and chairman of TAECO. “Tyre retreading will further enhance our present comprehensive aeronautical engineering and maintenance services for our existing and future customers. Dunlop Aircraft Tyres is one of the world leaders in this field and we are pleased to have the opportunity to co-operate with them.”