Nankang provides off-take tyres to Federal, appoints new leadership

On 1 November, Federal Corporation announced that chairman and general manager Chen Heng Kuan resigned. Recently, the tyre manufacturer’s board of directors appointed new leaders. Starting 9 November, Kuo Lin-Liang, chairman of Nankang Tire, will become chairman of Federal. Chung Cheng-Yen, an executive assistant to the chairman of the Federal, assumes the general manager position.

At the same time, the tyre company announced that it would entrust Nankang Tire to become its off-take partner in consideration of “the diversified development of the products, timeliness, sales order growth, and ensuring the stable supply of tyres for a long term in the future”.

According to Federal’s explanation, Nankang Tire will initially manufacture PCR products, and the sales market will be non-North America “to stabilise the source of goods and maintain the normal sales”.

In February this year, Federal said that its factory in Guanyin, Taiwan, “plans to suspend the production fully and temporarily”. At the time, the tyre manufacturer cited high anti-dumping duties imposed by the United States Department of Commerce on passenger and light truck tyres from Taiwan, which seriously impacted it. With the closure of the Guanyin factory, Federal has lost its ability to produce tyres in Taiwan independently.

After shutting down the Guanyin factory, Federal announced it had signed an off-take deal with XT Tyre in Vietnam. According to the tyre manufacturer’s plan, the tyres produced by XT Tyre in the initial stage are large-size and will be sold mainly in North America. However, there seem to be some problems with the cooperation between the two parties. Eight months after Federal announced its collaboration with XT Tyre, XT Tyre’s equipment installation progress seems to be slower than expected. At the same time, the US Department of Transportation has not yet approved the DOT code. Therefore, the Federal plan is to “find another OEM factory to respond in parallel”.