Greater demand from customers and increased production in lower-cost areas helped raise Continental’s first quarter profits by 48 per cent – far higher than expected. 1Q net income was 129.5 million Euro (1Q 2003: 87.4 million), which was nearly 30 million Euro higher than predicted by industry analysts. Turnover for the period was up slightly too; from 2.82 billion Euros in 1Q last year to 2.99 billion Euros in the first three months of 2004.
Continental is to bid for Phoenix, the German manufacturer of automotive-related rubber products. Phoenix is based in Hamburg, has 10,000 employees and sales last year were 1.153 billion euro. Key products, accounting for around half of sales, are fluid handling hoses, conveyor belts and air springs. Industry experts estimate that the acquisition will cost 227 million euro. Net debt stands at 277 million euro.
Tim Chesney, the Managing Director of Romney International Limited, the exclusive distributors of GT Radial brand tyres in the UK and Ireland, would like to state unequivocally that the recent story about PT Gajah Tunggal Indonesia (GT) being acquired by Michelin, is untrue. This story first appeared earlier this month in the US based ‘Modern Tire Dealer’ magazine. It was subsequently reported on the Internet sites of other trade press. Tim Chesney says that this account is without foundation and it should be disregarded. The extent of the inaccuracy of the story is shown in the supposed facts given by Modern Tire Dealer magazine. They quoted Gajah Tunggal’s daily radial tyre production capacity as being just 12,000 pieces when the correct figure is around 25,000 pieces, says Tim Chesney. He goes on to say that the reality is Gajah Tunggal has embarked on a major and exciting expansion programme. This will see the introduction of many new sizes, series and tread patterns, including the all new GT Champiro BAX asymmetric series and the Champiro BXT.
Bandag, Incorporated acquired an 87.5% majority interest in Speedco, Inc. from its founders and Shell Oil Products US. Bandag, a world leader in truck retread tires and tire management services, will operate Speedco as an independent business unit. Speedco, headquartered in Cayuga, IN, provides quickservice truck lubrication nationwide through 26 company-owned and six licensed on-highway locations.
TBC Corporation, one of the USA’s leading marketers of automotive replacement tyres, has reported record sales and earnings for the fourth quarter and year ended December 31, 2003.
TBC Corporation, one of the USA’s largest marketers of automotive replacement tyres, has announced that it has completed its acquisition of National Tire & Battery from Sears, Roebuck and Co.
So far the acquisition of General Tire in 1987 has not been a success story. During this year the loss will amount to 100 million Euro at least. This has to be changed, according to Conti’s chairman Manfred Wennemer and Martin de Louw who is responsible for Continental’s passenger tyre division and works in the North American headquarters in Charlotte, North Carolina. The two set out the goal: during the last quarter of 2005 the break-even point has to be reached. Wennemer puts his hope in de Louw as a new member of the board. De Louw in his strategy focuses on new products, the extension of low cost production sites such as Mexico, and the persuasion of a multi-brand strategy that in turn is borne by the brands Continental and General Tire. For the replacement market Continental hopes for good business with the car dealers because the tyres with the prancing horse have been widely sold on the OE market during the last couple of years – there will be a pull-through effect. Wennemer states clearly that Continental will continue its business with truck tyres in North America because this division has always been very profitable.
Kwik-Fit Fleet has announced record turnover for the first six months of this year; up 5.4 per cent to 54.6 million Pounds. This follows the acquisition last November of the Kwik-Fit group by CVC Capital Partners from the Ford Motor Co. KFF has also recently switched advertising agencies and London-based Atkinson Associates will now handle the 1.5 million Pound account.
Two years ago Trelleborg took over from Pirelli the 40 per cent share of the former commonly owned company Trelleborg Wheel Systems (TWS), which produces agricultural tyres. Now TWS aims at becoming market leader with its two brands Pirelli and Trelleborg.
A major part of this strategy is improving the name recognition of the Trelleborg brand, which up till now has been regarded as another name for bias ply tyres within the TWS-group while Pirelli covered the radial segment. In addition to that TWS is thinking about bringing another brand into the company’s portfolio. Whether this will be accomplished by the creation of a completely new brand, or by the acquisition of a known brand, has not been decided yet, Maurizio Vischi, president of TWS, told Tyres & Accessories.
The Swedish corporate group Trelleborg, named after the town where it is located, has reached a turnover of about 1.95 billion Euro and has almost 15,000 employees. As one of four Business Units, Trelleborg Wheels Systems (TWS) contributes about 330 million to the overall turnover, with 2,380 employees.
When it comes to the agricultural tyre segment, the direction of the TWS brands has been contrary. While the Pirelli brand was regarded as a synonym for the use of radial technology for agricultural tyres, the Trelleborg brand stood for bias ply forestry and implement tyres. Slowly, the boundaries seem to become blurred. For example, the new TM 2000 radial tyre for harvesters, and a new radial implement tyre, are produced with the Trelleborg logo on the sidewall.
The Trelleborg Group has signed an agreement with Smiths Group Plc of the UK to acquire its operations in polymer-based precision seals (Polymer Sealing Solutions – PSS). PSS has annual sales of approximately SEK 5.5 billion (599.37 million Euro) and some 6,000 employees, mainly in Europe and North America. Following the acquisition, the annual sales of the Trelleborg Group are expected to total SEK 22.5 billion (2.45 bn Euro), with approximately 21,000 employees in some 40 countries. The acquired operations will form a new business area within the Trelleborg Group.
Back in May 1996, Kwik-Fit was on the acquisition trail, buying a number of independent chains. The then Chairman, and yet to be knighted, Tom Farmer, said that the group was aiming to build up a second retail chain, made up of regional companies with a strong local presence. They would retain their original identities and, in some cases, compete with local Kwik-Fit centres. Although there was no national identity, the second chain did have a name – Tyre Plus. Now, almost exactly seven years later, the situation is very different, as Kwik-Fit has announced that Tyre Plus is to be integrated into the group’s core operation, with all the fast fit business coming under a single management structure. Kwik-Fit, under its new owners CVC Capital, has been undergoing an extensive review of all aspects of its operations and the decision to integrate Tyre Plus is the latest result of this process. So what will it mean? Firstly, the Tyre Plus head office in Motherwell will be closed, as will other support offices around the country. The Tyre Plus chain consists of 256 centres and the initiative will see the closure of less profitable centres and those that compete with Kwik-Fit centres. In all, 140 Tyre Plus centres will be closed, with the remainder being re-badged as Kwik-Fit centres. What will happen to the employees in the centres that are to close? Kwik-Fit says that “the majority of staff affected will have their employment transferred to Kwik-Fit” and that the company is working closely with the T&GW trade union to ensure that staff are aware of their position and the proposals on offer. Redundancies will be kept to a minimum and Kwik-Fit will make a further announcement after having consulted with the T&GWU. When the dust has settled, the number of fast-fit centres being managed within Kwik-Fit GB will total over 700 and it is an indication of how the trade – and Kwik-Fit’s aspirations under the new management – have changed as, before the company was sold to Ford, its stated aim was to be operating from 2,000 service points by the year 2005.
T&A attended the 15th Slovak Rubber Conference to find out what made it so popular with the delegates. As rubber conferences go the topics of conversation can be a source of stunned amazement to the layperson. The idea that people gather from across the continent, or indeed the globe, to discuss the rubber industry is beyond their understanding. If you tell them that the conference is in Paris or Hamburg, they smile knowingly. They understand, they believe, that it is a couple of days of high living on company expenses under the guise of a trade conference. Tell them that the event is in Puchov, in the Slovak Republic and their knowing smile turns to sheer incredulity. Where, they ask, is Puchov? And why would anyone go there? The where is Slovakia, close to the Czech border and the home of Matador. As to why anyone would go there, that may be because the Slovak Rubber Conference is an event of growing interest. The fact that some 200 delegates paid for the privilege of attending suggests that the event has a value beyond a night out sampling Parisian or Hamburg nightlife. Delegates came largely from Eastern Europe and the CIS, but also from the UK, Italy, Finland, Netherlands, Germany and doubtless several other nations. More than one delegate told T&A that the background of the event was of interest. It was generated by the Slovak Rubber Institute supported by Matador. The conference, although a flag flying exercise by Matador, was less commercialised than most others and the emphasis is on technology and business developments rather than an extended sales event – though needless to say some of the presenters and delegates had indeed something to sell. That lack of commercialism left delegates free to discuss the subject matter, make contacts and seek out technological partnerships, rather than face a barrage of sales talk from commission paid representatives. Indeed, one presenter made a rather obvious sales pitch that was greeted with some dismay by the organisers – this was not what they has intended, though inevitably commercialism will penetrate any successful event. The conference was opened by Stefan Rosina Jnr, who has stepped into the position of President of Matador upon the retiral of his father, Stephan Rosina Snr. He highlighted and thanked the delegates for their support of the 15th Slovak Rubber Conference. An event, he said, that represented a coming together of experts from the rubber industry with a growing global importance. It was relevant that this was the penultimate conference prior to European Union entry and he touched on the positive and negative impacts of EU entry both to Slovakia and to other states about to join the EU. “Most of the effects will be positive,” he felt assured, “There would be an access to markets, to technology and the reduction of trade barriers.” For the Conference he could envisage it reaching a wider audience once Slovakia was a member of a wider European Union. This should give the conference an even greater stance in the rubber industry. ”The negative effect though was one that posed a real threat to the industries of the new states. It made acquisition by larger foreign investors more of a possibility, but more immediately it could create a flow of qualified engineers to the West – drawn there by higher salaries, better conditions and a higher living standard. However, ultimately even that negative could be turned into a positive if these skilled engineers were to return in later years with a wider experience and greater skills base.”
The European Commission has given approval to the acquisition of the Viborg tyre distribution group by Euromaster, the Michelin subsidiary. This gives the green light to the completion of the acquisition, which was first announced last December.
Armed with a US$35 million loan from Industrial Finance Corporation of India (IFCI), in Washington, Apollo Tyres India is on the lookout for acquisitions. The company’s Chairman-cum-Managing Director, Kanwar Singh, said the company was open for acquiring tyre companies in the country and was in talks with a number of them. “There is no time frame for going for acquisition, but we are open to the idea,” he said. Apollo Tyres is aiming to bring down its borrowing cost by 50 per cent from current levels and is confident to reach a turnover of US$415 million during the current financial year. Commenting on reducing borrowing cost, Kanwar Singh said, “Not only we are expecting a steep fall in borrowing cost, but measures like a cost cutting drive will also bring in much better control.”
Smithers Scientific Services Inc. has reorganised as a result of its acquisition last March of a company specialising in environmental toxicology and analytical studies. The reorganisation brings three independent companies under the umbrella of the Smithers Group with worldwide headquarters in Akron, Ohio.
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