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BBS to Acquire Certain Hayes Lemmerz Assets in Europe and US

German developer and producer of lightweight wheels for premium segment vehicles, BBS International GmbH, a division of Punch International nv, has announced the acquisition of the Hoboken, Belgium subsidiary of Hayes Lemmerz International, Inc. Under the terms of the agreement announced on June 16, BBS has acquired all of the outstanding shares of Hayes Lemmerz Belgie B.V.B.A., including its factory based in Hoboken, near Antwerp. The Hoboken factory produces cast aluminium wheels for passenger cars and currently employs approximately 315 people.

In addition, Punch Property International nv, the Punch group’s property investment company, has entered into a definitive agreement with Hayes Lemmerz International – Georgia, Inc. to purchase the real estate and certain equipment associated with the Hayes Lemmerz subsidiary located in Gainesville, Georgia, USA. This acquisition is expected to be completed following Hayes Lemmerz’ cessation of production at the Gainesville factory. On May 12, Hayes Lemmerz announced it would close the factory by the end of December 2008. The Gainesville factory is situated less than 15 miles from the BBS factory in Braselton, and BBS will use the facility to support its non-OEM activities in the USA.

16th June 2008/by Tyrepress Editors

Broadening the Base of the Business

International News, Product News

Starco GB Ltd has appointed Chris Wilson (who joins from Summit Tyres) to spearhead a new industrial tyre aftermarket sales team. Wilson brings with him almost four decades of experience in the sector, which includes work at the sharp end of running a mobile fitting business. As a result of this – and the recent addition of the GlobeStar forklift tyre range – Starco’s management hopes to develop a real focus on the forklift end of the industrial to complement its growing OEM supply operation.

Up till now, Starco GB Ltd has remained relatively quiet about the ins and outs of the company’s generally OE-focused strategy. However, now that the business has made the strategic decision to move more into the aftermarket (while also continuing to develop its business to OEMs), the Europe-wide specialist tyre distributor invited Tyres & Accessories into Starco GB’s headquarters in Rugeley, Staffordshire.

T&A met managing director, Bob Cooper and account manager, Chris Royle, who explained that up till now roughly 90 per cent of Starco’s current business is OE related. When Bob Cooper joined the company 12 years ago sales amounted to somewhere in the region of £1.5 million a year. According to Bob Cooper, sales this year will be approaching £20 million, a clear demonstration that the OE-facing part of the business has served Starco well. In the future Starco GB is aiming to generate “very significant growth in the industrial tyre aftermarket” in addition to this, perhaps as much as doubling sales generated in this side of the business. Bob Cooper was keen to stress that the company has no plans to reduce its OE-focus. On the contrary, the strategy is to grow this part of the business too.

With offices right across Europe (plus one as far east as Kazakhstan and another in the US), you can’t help wondering if the decision to increase aftermarket focus is part of a pan-European move? In short the answer is both yes and no.

Some of the businesses Denmark-based Starco operates around Europe (take the company’s German branch for example) run on quite different strategies to the UK operation. In Germany the OE/replacement breakdown is the mirror image of what it is over here – roughly 90 per cent aftermarket sales and 10 per cent OE supply. So while Bob Cooper points out that there is an overarching drive to broaden the group’s base in general terms, the company is not in any hurry to change what is already working well.

Starco takes on GlobeStar forklift range

In addition to its existing range of Kenda pneumatic tyres and its own brand offering, Starco recently took on the GlobeStar solid forklift tyre range. With all the leading forklift tyre manufacturers feeling the pinch of increased raw material costs, and most now asking for raw material surcharges the cost/performance balance is as important to customers as ever. Not surprisingly the GlobeStar range is said to excel in this respect, offering good performance for a competitive price. At the economy end of the market, Starco have also brought in the Performer line for those seeking industrial tyres at a lower price entry point.

The new industrial aftermarket team, led by Chris Wilson, is comprised of three sales staff with backing from all the other departments of their business. At any given time, Starco’s Rugeley warehouse holds roughly £3 million of stock. Up to a third of this can be described as industrial, including brands such as TVS, Gommasol and Marangoni. The rest of the stock comprises of ATV, wheelbarrow, turf, high speed trailer, small materials handling and other specialist wheels and tyres.

Starco GB has also invested in high speed automated tyre fitting machinery, which allows the company to send more 12 to 16-inch tyre and wheel assemblies to OE customers than it ever could with man-power alone. The company has also invested in the construction of temperature controlled curing rooms in order for the company to expand the tyre-fill service it offers it’s customers.

Planning for the expansion of the industrial aftermarket side of the business began three years ago and the company has been operating in the wider industrial segment for around eight years now. So, if Starco’s acquisition of a new brand and “very significant” investment in stock is anything to go by, it is clear that the company is preparing for the long-term.

10th June 2008/by Tyrepress Editors

Report: Leading UK Tyre Companies Face Tough Times

A new report has found that the UK’s largest 50 tyre companies now control 94 per cent of the market, an increase from 90 per cent 2 years ago. As a result, these major companies are said to be “fighting each other headlong in a battle for market share.”

The report, produced by Plimsoll Publishing, found that these levels of competitiveness are having an effect on the financial stability of some businesses. Of the 50 Tyre Manufacturers & Distributors companies surveyed: 15 of the companies are showing no sales increases at all; 13 are selling less than they were 2 years ago; 26 companies have failed to increase sales at the same rate as their investment; and 26 companies increased their debts simply to hold their place in the market.

28th May 2008/by Tyrepress Editors

Nokian Trials RFID System

Nokian Tyres has taken on an RFID-based “manufacturing execution system” for use in its tyre production process. The solution reportedly the first and largest deployment of the UHF RFID based system in Finland. A total of 40 RFID readers and some 1000 RFID tags were deployed at Nokian Tyres during this project.

According to the company, the new system is used to plan, track and control the tread component production at the Nokian Tyres production plant located in Nokia. Additionally, Nokian Tyres is now able to monitor their production in real-time and ensure the availability of tyre materials.

27th May 2008/by Tyrepress Editors

Continental Tyres Increases Australia Commitment

Continental is increasing its position in the Australian commercial vehicle tyre market. Following Continental AG’s acquisition of Siemens VDO the companies’ Australian wings will now amalgamate into a new office complex in Melbourne’s northern suburb of Bundoora, Supply Chain Review reports. According to the magazine, Continental Tyres has significantly increased its commitment to the Australian market with the appointment of key marketing, sales and technical positions, all based locally.

“By the establishment of local offices and appointment of an Australian team Continental has shown its high level of commitment to the Australian market,” General Manager Sales and Marketing, Peter Miglic is quoted as saying. “One thing that keeps Continental at the forefront of the global tyre industry is our significant commitment to research and development. Last year we spent the equivalent of $72 million on developing and making better tyres, this equates to around 3% of our total sales. Conti is at the fore front of global tyre development.”

27th May 2008/by Tyrepress Editors

Conti ‘On Course’ for 2008 Targets

The first three months of the year have provided Continental AG with results that indicate the company is on course to achieve its 2008 sales and operating targets – this is the word from the company on April 29, following the public release of its quarter figures. “Despite the in part unsatisfactory trends on the tyre markets, we have clearly exceeded our expectations for the corporation on the whole. A help here was the satisfactory development of car production on the whole, particularly in Europe and Asia,” said Continental Executive Board chairman Manfred Wennemer. “Backed by the solid results for the first three months, we are confident that we will achieve our targets for the year. We will counter further rises in raw material prices with price increases, improvement in our product mix and further enhanced efficiency.”

29th April 2008/by Tyrepress Editors

Continental to Sell Fuel Supply Business Unit

In order to focus more on core business Continental intends to sell its fuel supply business unit. As part of the company’s Powertrain Division, this business unit produces fuel transport and tank bleeding systems, and Conti reports that it is both profitable and a market leader. In spite of this, it must go: “As this business is not among the core activities of the division, which focuses on components for motors and powertrains, we have decided to sell it after an in-depth analysis,” explained Dr. Karl-Thomas Neumann, the Continental Board Member responsible for the Powertrain Division.

Dr. Neumann mentioned that a key element of Continental’s strategy is active portfolio policy: “This means that we always continually assess both the possible acquisition of companies as well as options for selling company units. We take into consideration the market position and size of a business, its sustainable profitability, its strategic positioning and how much the current unit counts towards the core business of the company,” he explained.

24th April 2008/by Tyrepress Editors

Goodyear Responds to ATC Offer

The letter of proposed acquisition written by American Tire Corporation has not yet landed on the desk of Robert J. Keegan, however Goodyear has already responded to ATC’s sudden expression of interest in its Kansas OTR tyre plant.

According to a Goodyear spokesperson, the company has not received any communication from ATC. “We are very pleased with the performance of our OTR business and continue to see opportunities for Goodyear in this business,” the spokesperson said. “We have not announced plans, or an intention, to sell any part of this business.”

22nd April 2008/by Tyrepress Editors

ATC Outlines Desire to Acquire Goodyear OTR Tyre Facility

Amongst the regular assortment of correspondence postal workers deliver to Goodyear each day will shortly appear a letter proposing the purchase of its Topeka, Kansas facility. The people at American Tire Corporation (ATC) have produced a letter to this affect, and it appears they have already licked the envelope seal, stuck on a stamp, and dropped the acquisition offer through the slot of the nearest mailbox.

According to ATC, under the proposal ATC would buy out Goodyear’s OTR tyre facility in Topeka at “any reasonable price.” Built in 1944 by US government, Goodyear’s Topeka tyre plant is the largest Goodyear OTR tyre facility in the world and the company’s only one in North America. Should such an acquisition be successful, ATC says it will spend US$200 million modernising this “old OTR tyre plant” (to quote ATC), increase production capacity for all sizes of OTR tyres by a minimum of 20 per cent, and “create more job opportunities with a better annual pay in the state of Kansas.”

21st April 2008/by Tyrepress Editors

Tornel Takeover to Give JK 15.3 Million Unit Capacity

The 100 per cent acquisition of Mexico’s Tornel by JK Tyre, announced on April 11, sees the Indian tyre manufacturer become the country’s fourth-largest. The £34.19 million acquisition, which is expected to close by the end of May, will be funded through a special purpose vehicle (SPV) – a company created solely for this particular transaction – based in Mexico.

“We will raise the money through internal accruals and debt, which will be structured though a SPV,” commented JK Tyres & Industries’ vice-chairman & managing director Raghupati Singhania. “Tornel will be a fully-owned subsidiary of JK Tyres and there will be no dilution of the existing shareholding in the company. We shall also bring a rights issue in the next few months, which will be in the ratio of 3:1, to help bridge the funds for the acquisition. The price of the issue will be determined at the time of offer.”

14th April 2008/by Tyrepress Editors

JK Tyre Gains Access to NAFTA Markets Through Tornel Acquisition

India’s JK Tyre & Industries has gained a channel through which it can access the NAFTA markets following the purchase of Mexican tyre manufacturer Tornel. The Rs 2.7 billion (£34.19 million) acquisition was announced on April 11, and will give JK Tyre the scope to expand in the Americas thanks to the free trade agreement in place between Mexico, Canada and the US.

“The acquisition is also a strategic fit for JK Tyre as we are already the largest exporter to the North and South American markets,” chairman Hari Shankar Singhania said in a statement released by JK Tyre. The statement added that Tornel operates three tyre facilities with a combined annual capacity of 6.6 million tyres, and employs around 2,000 people.

11th April 2008/by Tyrepress Editors

Goodyear’s Laura Thompson Elected Company Officer

Goodyear’s Board of Directors has voted to appoint vice president of business development, Laura Thompson, as an officer of the corporation. Ms Thompson has served in her current role since June 2005 and is responsible for acquisition, divestiture and partnership activities in supporting Goodyear’s long-term strategies.

The 43-year old Akron region native began her career with Goodyear in 1983, working part-time while finishing her undergraduate degree in accounting from the University of Akron (she also holds an MBA in finance from the same establishment). Ms Thompson then served in various financial and accounting staff positions, both in business units and corporate staff, until being named manager of finance for Research and Development in 1997. In 2000, she was named director of Investor Relations and served in that capacity for two years. She became finance director for consumer tyres in the company’s North American Tire business in 2002, and was named director, business development for the unit a year later.

9th April 2008/by Tyrepress Editors

Lanxess Acquisition of Majority of Brazil’s Petroflex Completed

Specialty chemicals group Lanxess AG has completed the acquisition of an approximate 70 per cent holding in Petroflex S.A., Latin America’s largest rubber producer. Lanxess is paying some 200 million euros for the package of shares. The transaction took effect on April 1, 2008. Petroflex S.A. will be included in Lanxess’ consolidated financial statements from the second quarter of 2008. In accordance with local regulations, Lanxess will shortly issue a public takeover offer for the remaining shares.

“Petroflex ideally complements our product portfolio and strengthens our position in one of the world’s most important growth markets,” said chairman of the Lanxess Board of Management Axel C. Heitmann. “In this way we are decisively reinforcing our position in Latin America and welcome our new employees with whom we want to continue growing.”

4th April 2008/by Tyrepress Editors

Bosch Closes Deal to Acquire Accu Industries

Robert Bosch LLC has finalised its acquisition of Accu Industries Inc. The closing clears the way for the integration of Accu Industries facilities, operations and associates into the diagnostics business unit of Bosch’s North American Automotive Aftermarket division.

According to Bosch, the integration will strengthen the overall Bosch Diagnostics North American operation and position the division for long-term growth and profitability in the future. (Tire Review/Akron)

3rd April 2008/by Tyrepress Editors

TGI Buys Serit Tires

Tire Group International (TGI) has bought US-based Brazil and the Caribbean tyre export specialist, Serit Tire Wholesale (STW). According to an official statement announcing the acquisition, TGI purchased all STW’s assets for an undisclosed sum.

“This acquisition gives TGI an instant presence in Brazil, which is a market we have been absent for the last nine years. We are also retaining the services of STW’s president Ernie Rodriguez. Rodriguez will be responsible for the continuing development of this market, as well as developing other key markets we have targeted. Rodriguez has over 15 years experience in International Tire Sales and his expertise will be another asset TGI can count on,” said Tony Gonzalez, Tire Group International’s Chief Executive Officer. Gonzalez also stated that TGI will continue to be aggressive in its growth strategy and will look for other acquisition opportunities that make business sense and fit into TGI’s growth plans.

28th March 2008/by Tyrepress Editors