Dunlop Zimbabwe to Seek Production Boost
Local news sources have quoted Dunlop Zimbabwe managing director, Kennedy Mandevani, saying that the company is looking to capitalise on the decrease in rubber prices by boosting production. Dunlop Zimbabwe has experienced an increase in sales following its licensing by the country’s Reserve Bank to deal in foreign currency. This has provided the company with the opportunity to import raw materials, though Mandevani said that FOLIWARS sales are “not generating enough foreign currency for raw material importation yet.” He said that the company may seek “short-term external financing to bridge this gap.” It is hoped that by increasing production, the additional foreign exchange sales, and the benefits associated with them, will come.
Continue ReadingLockout Declared at MRF’s Puducherry Factory
Indian manufacturer MRF has declared a lockout at its Puducherry plant in Southeast India following what has been described as ‘labour unrest’. The company has been facing such problems at its other facilities for more than a year, most dramatically seen when its Tiruvottiyur plant, near Chennai experienced a lockout in late 2007 and early 2008. At this time, the Tamil Nadu state government, its patience tested, beseeched the company to resolve its differences with employees – and threatened to take over the factory if it failed to do so. Company officials have not yet commented on the latest developments.
Continue ReadingDneprogas Turns Off Dneproshina’s Gas
Ukranian gas-supply company Dneprogas has cut off the country’s second largest tyre maker’s gas supply. According to a report published at ityre.com, Dneproshina was disconnected from the mains on 17 February, due to the “absence of limits on gas supply.” A number of other small and medium-sized enterprises are also said to have been cut off for the same reason.
Continue ReadingNew BTMA Chief Executive Named
After more than 12 years chief executive of the BTMA (and BRMA as it was known previously), John Dorken is retiring. His successor, Graham Willson, brings 30 years of industry experience to the association having worked in both vehicle construction and more recently in tyre manufacturing. Wilson will take up the position from 1 May 2009. BTMA chairman, Mark Brickhill commented: “John has made a major contribution to the industry over the years and has guided the association through many changes. He was instrumental in setting up the Tyre Industry Federation which works to align all the industrys stakeholders including the National Tyre Distributors Association and Tyre Recovery Association. We will miss his extensive knowledge and considerable expertise. However, I am excited by the appointment of Graham to this important mission. Graham joins us from Michelin and has previously helped the Association in obtaining relief from the climate change levy. Our industry faces great challenges at this time and the Associations role has never been more important.”
Continue ReadingNETE Buys 15 HiQ Outlets
North Eastern Tyre and Exhausts bought fifteen HiQ-branded retail outlets for £3 million, apparently using cash reserves and bank credit to finance the acquisition. This news comes as the company published annual results which saw turnover rise by 7.7 per cent to £43 million. While like-for-like turnover (sales that don’t take into account new openings) are only expected to rise slightly in the coming 12 months, the new branches are expected to help the company achieve annual sales of £50 million this year.
Continue ReadingFitch Relegates Michelin to BBB-
Fitch Ratings has downgraded Compagnie Generale des Etablissements Michelin Long-term Issuer Default Rating (IDR) and senior unsecured ratings to a BBB- rating from BBB. According to a statement detailing the news, Michelin’s “outlook for the long-term IDR is negative.” The downgrades are said to reflect “the further deterioration of Michelins financial profile beyond Fitchs previous expectation amid the accelerating downturn in the global auto markets…” Noting that the group net leverage has increased 50 per cent (to 2.7x at full-year 2008 from 1.8x at full-year 2007), the agency said it “does not expect a marked improvement in the tyre manufacturer’s financial profile before 2010.” The analysts put the deterioration down to the slump in tyre demand the market has experienced “particularly in the fourth quarter of 2008.” Fitch expects a further decline of the global tyre markets in the first half of 2009, primarily due to significant production cuts by vehicle manufacturers. “A key issue for management is adjusting its manufacturing capacity to reflect expected volumes in the future,” the agency said in its statement.
Continue ReadingSelf-Inflation Device Scoops 2009 Tire Technology Awards
The Self Inflating Tire (SIT), developed by Coda Development, has walked away with the Tire Technology of the Year award at the Tire Technology Awards for Innovation and Excellence 2009, presented at Tire Technology Expo in Hamburg, Germany on February 18. Coda Development’s SIT system is primarily designed to aid fuel economy and safety. As well as benefiting drivers through the elimination of pressure checks and the need to manually inflate tyres, it helps to address the serious drawbacks of incorrect tyre pressure.
Continue ReadingContinental Sime Tyre Launches New Dunlop 4×4 Ranges
Malaysian Conti subsidiary Continental Sime Tyre (CST) officially launched two new models from its Dunlop 4x4 tyre range at an event held in Malaysia’s Genting Highlands. The two models to be launched are the MaxGrip AT2, an all-terrain tyre, and the Road Trekker 2, a product with a greater on-road focus. Both tyres are available in all CST network dealers. According to CST chief executive officer Benoit Henry, the continuation of the company’s 4x4 range into the value segment, demonstrates “Continental Sime Tyre’s commitment to our business partners, and with your continued support, commitment and teamwork, this will allow us to face the market challenges together.”
Continue ReadingBridgestone Sustains 52% Operating Income Decrease
Bridgestone has announced its consolidated business and financial results for the fiscal year ended 31 December, 2008. The company commented in its report on the “challenging operating environment,” with its major markets in Asia, the USA and Europe declining over the course of the fourth quarter. This environment is illustrated by the worldwide 5 per cent decrease in tyre segment sales, down from 2,756 billion yen (20.54 billion pounds sterling; 1 GBP: 134 JPY) in 2007, to 2,629 billion yen (£20.05 billion), an effect in part, the company says, of the exchange impact of the stronger Japanese yen and a decline in unit sale. However, bottom line increases also hit hard, as Bridgestone tyre lost 52 per cent of its operating income; down to 92.7 billion yen in 2008 from 195 billion in 2007. Bridgestone’s statement said that it “worked to maximise its sales momentum by introducing appealing new products worldwide, while at the same time improving and expanding strategic production sites around the world in support of respective product domains, particularly those that have been identified as strategic and important to the company’s future growth.” The fourth quarter’s decline in global automotive production and sluggish demand in the replacement market went some way to affecting the drop in sales in all three major markets.
Continue ReadingA focus on changing perceptions
Retreading has long been recognised by commercial fleet operators as a major means of saving on operating costs, yet in some quarters retreads are still seen as offering less than their new tyre equivalents. Putting a stop to these misperceptions through elevating public awareness of retreading’s economic and environmental benefits has been a major focus of the US based Tire Retread & Repair Information Bureau – more commonly known as TRIB – for almost four decades. Recently Tyres & Accessories spoke with TRIB managing director Harvey Brodsky about an industry that commercial vehicle operators simply cannot afford to ignore.
Continue ReadingPirelli Keeping its Options Open Over Continental Tyre Purchase
Pirelli is interested in “analysing” the possibility of a friendly deal with Continental AG for at least part of its tyre business, despite denying this only last week. Pirelli chairman, Marco Tronchetti Provera, made his soft offer of interest in the company in a video interview given to the Financial Times and published online today (20 February). When asked if Pirelli had any interest in Continental/Schaeffer Tronchetti Provera answered: “It’s too early to say. But if the price is right, if we are asked to be part of a transaction, it could be interesting to analyse it - but only if its a friendly transaction.” Re-iterating the early stage of Pirelli’s interest in Continental, the company’s press office issued the following brief statement later that afternoon: “With regard to comments on possible Pirelli transactions on Continental, the company declares that no transaction has been defined even along general outlines. The company also points out that, consistent with the financial rigor foreseen by the guidelines of the recent 2009-2011 industrial plan, any possible future transaction of a strategic nature would not comport any recourse to the market.” However, while the press department’s statement may have played down Tronchetti Provera’s words, earlier in February Il Mondo claimed Pirelli executives had conducted - on separate occasions - meetings with JP Morgan, Deutsche Bank, Mediobanca and a number of advisers.
Continue ReadingGoodyear Committed To New Akron Headquarters
More than a year ago, Goodyear reached an agreement with the city of Akron, the state of Ohio and California developer IRG to build its headquarters near the current one, rather than re-locate elsewhere. The plan was on track until the end of 2008, when a credit squeeze halted IRG’s financing. Though the project is still in limbo, Goodyear has said it still plans to move forward. “All the parties involved are still extremely confident and extremely committed to the program, but because of the credit crisis it has certainly slowed the progress of finalizing the agreement,” Goodyear spokesman Scott Bachman said. The agreement included 30 million dollars in state tax breaks for Goodyear that are contingent upon it maintaining an employment level of at least 2,900 in Akron – just 200 less than the tyre maker currently employs there. Due to a downturn in demand for tyres, Goodyear recently announced it would cut nearly 7 per cent of its global workforce of about 75,000, but would not name specific facilities that would see job losses. (Tire Review/Akron)
Continue ReadingKremenchug Wheel Plant Idles Production
Ukrainian cold-formed steel wheel maker JSC Kremenchug Wheel Plant has opted to suspended production between 12 February and 16 March. According to a report published at Russian news site, ityre.com, the company cited sharp declines in demand as the reason. Kremenchug Wheel Plant reportedly also intends to lay off 334 people. The latest move follows an earlier decision to reduce its working week from five to three days.
Continue ReadingContinental AG Reports 2008 Record Net Loss
Continental AG has reported a record group net loss for 2008, following what executive board chairman Dr Karl-Thomas Neumann called “an unusual year.” The net loss was the result of the company having to write down 1.23 billion euros of “goodwill impairment” due to poor performance in the automotive group’s powertrain division. This was compounded by the effects of high raw material costs and dramatic falls in OE demand during 2008. Consolidated sales came in at 24.239 billion euros, with a group margin of 7.6 per cent – a figure within the company’s “EBIT target corridor.” Nevertheless Continental was able to reduce net indebtedness by roughly 373 million euros, leaving 10.483 billion euros. Rubber group figures for 2008 faired considerably better with sales of 9.35 billion euros and 10.5 per cent margin. Passenger and Light Truck Tire posted sales of 5.1 billion euros, adjusted pre-tax profits (EBIT) of 644.8 million euros equating to a margin of 13.1 per cent. ContiTech’s numbers totalled 3 billion euros, 327.8 million euros and 11 per cent for sales, adjusted EBIT and margin. Commercial Vehicle Tire (CVT), however, survived on a slim margin of 2.7 per cent (36.3 million euros) despite sales of over a billion. Dr Hans-Joachim Nikolin, executive board member responsible for commercial vehicle tyres, explained that the virtual collapse of OE demand and raw material prices were at the root of the division’s narrow margins. The 290 million euros of increased costs the group had to pay as a result of raw material price increases at the root of CVT’s woes as this division had to face 100 million euros of this figure alone. However, commercial vehicle tyre’s particularly dependence on OE sales is also exposed in the full-year 2008 results.
Continue ReadingCooper’s Melksham Plant Halts Production for a Week
Cooper Tire Europe has suspended production at its Melksham, UK production plant. According to a company spokesman production and closed for a week in order to reduce stocks. However, a BBC news report added that the move would also “help safeguard its future.” There is apparently no threat to jobs at the plant which employs 1100 people. Production is expected to return to normal next week.
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