Twice as much in half the time – Giti’s plan to penetrate European tyre market in five years

Goodyear and Michelin penetration into Europe took a few decades, Bridgestone more than halved that, Hankook and Kumho did it in about 12 years, Giti Tire want to do it in five. The largest Chinese manufacturers are growing quickly, they have their sights set breaking into the US and Europe, and what’s more they plan to do it quicker than any company has before. Speaking to Tyres & Accessories, Dr Enki Tan predicted that Giti Tire will soon be known as the manufacturer to emerge from China. Giti is already a global scale operation, with 2007 sales totalling the best part of $2 billion. And while the fact that the group’s holding company is registered in Singapore means it can’t be officially be called a Chinese domiciled manufacturer, semantics can’t stop Giti from being the largest manufacturer of tyres in China.

The company’s biggest production base is in Hefei, Anhui province (not a long way from where Continental recently announced it will build a Greenfield site of its own). The manufacturing complex here employs around 6400 staff and covers some 1.11 million square metres – only 350,000 m2 of which is currently covered. At the end of 2007 production totalled 34,000 passenger/light truck, 6500 truck and bus, and 4000 bias tyres per day.

Now, the management has chosen to ramp production up even further and add an additional 10 million units-a-year production facility in some of the unused space on the Anhui site (see diagram). Work began on this in July 2007 and the first phase is expected to be complete in 2008, with the remaining capacity coming on-stream in 2009.

In addition to a range of TBR, PCR and bias tyres; Giti Anhui has on-site cord and flap/tube production lines and acts as a feeder to the company’s four other Chinese manufacturing sites. Anhui Primewell Rubber & Plastic Co., Ltd, the tube and flap division, produces some 16,000 car tubes and 11,000 flaps. Anhui Prime Cord Fabrics Co Ltd produces 24,000 tons of tyre cord each year, which is distributed 50:50 between nylon products destined for bias tyre production and polyester for passenger car carcasses.

All this makes for a production plant that could easily feature as a top 100 global tyre manufacturer all by itself. In 2007 Giti Anhui alone is expected to turnover some US$740 million, a hug 2000 per cent more than it did in 1994. Export (43%) and domestic OE (30%) represent the Anhui factory’s top business’ top sales channels, by quantity.

‘World class’ R&D centre planned

The next stage in Giti Anhui’s rapid ascendancy is to add what the company describes as a “world class” research and development centre. Speaking to T&A, Dr Enki Tan confirmed that Giti’s brand new research and development centre will be a multi-million dollar project that will include the construction of a new purpose built, architecturally designed information centre. And, if the R&D managers get their way, it will be fitted out with some of the latest equipment on the market.

But that is not to say that the Giti facility is currently using inferior equipment. On the contrary, while the manufacturing process in Anhui is relatively labour intensive – compared to European factories, there are great swathes of modern machinery in the production line. Most of this is European in origin, but the remainder comes from Giti’s sister company, Seyen.

Take extruders for example, Giti’s Hefei plant uses at least three Troester Triplex extruders, with this role being performed by Guilin equipment in other parts of the factory. Add to that Mitsubishi 90’ cutting machines, Rodolfo steel cord calendaring and Troester, Nakata and Krupp Duplex extruders for truck and bus tyres, and you see that no corners have been cut in terms of machinery.

Looking at the factory’s personnel, one may be surprised at just how educated the workforce is. Of the 6400 people employed at the Hefei plant, almost 15 per cent have attended university’s to varying levels. And they are loyal too. 63 per cent of employees have been with the company over 5 years. The calibre of personnel employed in the company’s research and development department demonstrate this even more clearly. Perhaps that is why the company’s top-level management is confident about investing heavily in the a “world class” R&D centre in Hefei city, Anhui, province.

While many members of the R&D team are relatively recent university graduates. The top 10 per cent are very experienced engineers, with employment histories from a range of well-known Asian (mainly Japanese) manufacturers including Bridgestone, Yokohama, Hankook and Federal. The majority of these are holders of postgraduate and doctoral degrees and the clear intention is for the older, perhaps wiser engineers to train the younger R&D staff in the way they should go.

Taking a stand

Giti Tires’ multi-level exhibition stand was one of, if not the biggest, on show at the inaugural Reifen China. And, as if to symbolise the company’s position in the Chinese market, it covered an almost central position in the exhibition hall. Now, following a successful debut at the European Road Transport Show in Amsterdam at the end of last October, Giti Tire is poised to raise its image in the UK and across Europe.

During the Shanghai show, T&A learnt that Giti Tire has booked a “large” stand at next year’s Commercial Vehicle Show at the Birmingham NEC. Company representatives told T&A that Giti Europe has invested a “significant amount” in publicising the company’s ever-increasing range of truck and bus tyres at the show. The stand has been designed to raise the profile of both Giti’s brands and product range. Apparently, the company will be continuing its strategy of taking high profile exhibition plots, and has positioned itself alongside some well-known tyre manufacturers’ stands at April’s show. Giti’s 54 square metre stand (Hall 8 -141) will be designed to raise the profile of the Giti brand and product range.

According to the company, the rapid growth in China’s economy has provided the perfect opportunity for Giti Tire to expand the Chinese tyre manufacturing industry, with increased activity in sales and production in spite of intense competition in the Chinese market.
The Giti Tire Group is China’s largest manufacturer and supplier of top quality tyres and, with five manufacturing plants and a network of more than 45 sales and service offices in China, the company now exports its products to over 80 countries in Europe, Asia, America and Africa.