Deestone: A Successful Entry into Radial Production

Thai based commercial and two-wheel vehicle tyre specialist Deestone, through the founding of the new company Deestone Radial Tire Co. and the establishment of a new factory, has set foot into market territory held by the “Big Three”. The Thai radial tyre market, like almost every other around the world, is dominated by Bridgestone, Michelin and Goodyear. Yet the decision makers at Deestone Ltd. are losing no sleep over the position their own passenger car and light commercial vehicle radials hold in the domestic market – only two years after the opening of the company’s first radial tyre factory, its Thai market share has grown to five per cent. As Deestone’s business development manager Noppadol Nimdee explained during Tyrexpo Asia, this market share is expected to further increase.

At present the new radial tyre plant is producing around 4,000 passenger car and light commercial vehicle tyres a day, a figure equalling just under 1.5 million unit per annum. Output should, however, double by the end of this year, and by the end of 2010 the factory should be manufacturing as many as 12,000 tyres a day.

Through its successful entry into radial manufacturing the Thai company (which was established in 1977 and began producing crossply commercial vehicle tyres a year later) will most likely dedicate an even greater share of its output to export markets. Currently around 70 per cent of total tyre production – commercial vehicle, agricultural, two-wheel, bicycle and even small specialty products – is exported. Upon completion of the radial factory’s capacity expansion programme, this export share figure should rise to 80 per cent, the business development manager states. Market share at home in Thailand, meanwhile, is anticipated to at the very least remain the same, Mr. Nimdee calculates.

The range produced at the radial tyre factory already includes four passenger car tread patterns – all summer tyres – and six light commercial tread patterns, again solely summer tyre models. Scheduled for release during the course of this year is the company’s first SUV/4×4 tyre, and the first winter tyre products are anticipated to arrive a year later.

The company’s plans to produce winter tyres reflect an increased interest in exports to Europe. At present Deestone exports to over 50 countries, the most significant market being the United States. However the company also ships a substantial number of tyres to Britain, Germany, Italy and the ASEAN countries. The Thai manufacturer has even recently applied for the necessary “CCC-Mark” (China Compulsory Certificate) in the hope of selling tyres in the Chinese market from next year onwards. Companies responsible for introducing Deestone tyres to various markets are typically wholesalers. Many of these trading partners specialise in a particular product segment rather than holding the distribution rights to the full range of Deestone products.

In addition to its main “Deestone” tyre brand, the company continues to manufacture tyres under its second brand name, “Thunder”. These products are predominantly sold in Thailand through the “B-Quik” fast-fit chain, although a small quantity is also exported.

Having now built its first radial tyre factory (the country’s largest Thai-owned radial production facility), Deestone is not sitting back and relaxing. Company management make no secret of concrete plans to set up a truck tyre radial plant within the coming two to three years. At the present time feasibility studies are being carried out; a boosting of R&D staff is also already underway. Should the factory enter operation in 2010/2011 as planned, it will probably have an initial daily capacity of at least 2,000 TBR tyres, approximately 750,000 tyres per annum.