Shandong Province promotes tyre industry upgrading

On November 11, Shandong Province announced the ‘Action Plan for a Powerful Province of Advanced Manufacturing (2022-2025)’. The Shandong authority specifically emphasised in this guidance document the necessity to promote increased quality in the development of high energy consuming industries, including the tyre industry. In addition, the concepts of “intelligent upgrade”, “green transformation”, “service extension”, and “ecological agglomeration” mentioned in the Action Plan also set out a rough outline for the upgrade and development of tyre companies in Shandong Province in the next few years.

Upgrading is inevitable

A senior executive of one Shandong tyre company told Tyrepress that the roots of local tyre company owners continued to inform the way these companies are developing. Many were farmers before they entered the industry, borrowing money from the bank to build a factory and transform their identity from farmer to entrepreneur. However, in their view, the owners of these factories have not transformed their minds along with their identities. As a result, a series of problems have emerged: polluting the environment in the process of development and occupying the market through price wars.

In many regions, they have made the process of “extensive development” – a term not always used positively – synonymous with the tyre industry.

The disadvantages of extensive development have attracted the attention of the authorities. At a press conference held not long ago, An Wenjian, deputy director and spokesperson of the Department of Industry and Information Technology of Shandong Province, said that the (Shandong Province) manufacturing industry is still “big but not strong”, and some long-term and structural problems have not been resolved. With the Action Plan announcement, Shandong Province once again expressed its determination to pursue high-quality development. Cooperating with the government to carry out industrial upgrading is bound to become an inevitable choice many tyre companies make in the next three years.

Technology upgrade

Intelligent upgrading is a crucial point of the transformation. In recent years, several Shandong tyre companies have launched intelligent manufacturing workshops and factories. With the Action Plan advancement, Shandong Province will improve infrastructure construction such as 5G, gigabit optical networks, and data centres, accelerating the popularisation of “intelligent manufacturing”. According to the plan, in the next three years, Shandong will cultivate intelligent manufacturing in more than 100 locations every year.

Green transformation is inseparable from the support of technology. In the next three years, Shandong’s tyre companies need to “eliminate inefficient equipment” while launching green tyre products with “energy saving, environmental protection, harmlessness, high reliability, long life, and recyclability”. By 2025, Shandong Province hopes to build 500 provincial or national green factories. It is worth noting that the disposal of waste tyres has also been included as part of the green transformation. Yan Jie, deputy director of the Department of Industry and Information Technology of Shandong Province, said that (Shandong Province) will form a new closed loop of green development and implement standardised management of the recycling industry of waste tyres and other renewable resources.

Variety of upgrade methods

On November 17, Sailun Group’s Dongjiakou tyre factory became a core project of the transition from old to new growth drivers in Shandong Province, indicating that the local government will favour the advanced tyre factories representing the high-end chemical industry. However, it is worth noting that this round of upgrading promoted by Shandong does not involve only high investment and high-tech projects. The upgrade methods of tyre enterprises are diverse, and the part of “service extension” may give tyre companies more inspiration.

The Action Plan emphasised promoting the deep integration of the modern service industry with the advanced manufacturing industry, focusing on research and development design, modern logistics and supply chain management, energy conservation and environmental protection services, full life cycle management, and e-commerce. The “service extension” part shows that tyre manufacturing enterprises can consider other value-added services around the core of “manufacturing”. Some tyre companies in Shandong have already carried out corresponding work. For example, some tyre companies in Guangrao have established their fleets to provide logistics and transportation services for tyre products. After the Action Plan release, more and more tyre companies can participate in such things.