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The financial plight of the Kumho Asiana Group is deepening as creditors defer liquidity provision while devising a turnaround plan for two of its affiliates, reports Tire Review. Kumho Tire could not pay wages to its employees for a second straight month, while Kumho Industrial became the second affiliate to announce it would be unable to send out salaries.
Hero Tires has released corporate promotional videos for both the English and Chinese markets. The European film, presented in English, consists of a montage incorporating the manufacturing of various Hero tyre models and such aspirational imagery as a fashion show. Meanwhile the Chinese video draws on the history of the country in order to emphasise the heritage of the brand, which is manufactured in China.
Hanover-based Delticom AG has released preliminary 2009 financial results that show group revenue totalled 310 million euros, compared with 259 million euros in 2008. The growth realised (+20 per cent) was twice as strong as expected. Last year, 800,000 customers purchased tyres for the first time in one of the company's number of online shops, which includes mytyres.co.uk in the UK.
Hankook Tire has reported record global sales and operating profits of 4.8 trillion (£2.604 billion; 2.985 billion euros) and 549.3 billion won respctively. In the period global sales grew 18 per cent year-on-year, while operating profits shot up nearly five-fold (2008: 114.2 billion won), despite the global recession. 2009 also saw the company’s European production centre in Racalmas, Hungary turn a profit after sales shot up 55 per cent year-on-year (see table). Now the company’s management has raised the bar for 2010 with a global sales target to exceed 5 trillion won (£2.717 billion; 3.109 billion euros) for the first time in its history.
Morgan Stanley analysts have described Conti's recent share issue as a “very significant” move forward in an investor's note dated 8 January. “We think Conti's latest recapitalization effort is positive for four main reasons: it enables the forward start on the 2010 debt maturities… the 35 euros price was a smaller discount than… expected; [it] increases free float to 25 per cent from 11 per cent and helps stabilize the company's image in the marketplace which reduces the risk to the underlying business.” While they conceded that this final point is “intangible,” the analysts report that the share offer addresses a key concern “that Conti's winning culture and ability to retain existing contracts, attract new business and new human talent was threatened by an unstable financial future.” In this regard, we think Conti is turning the corner.
Continental AG shares rose over 10 per cent yesterday, following the start of a widely expected 1.1 billion euro rights issue. About three quarters of the new shares are said to have been placed with investors already. The offer also has the dual effect of diluting Schaeffler’s stake in the company to just over 75 per cent. Strategically, this is something Schaeffler (which previously indirectly controlled 90 per cent of Conti) shares is likely to be happy with as it is still firmly in control of the company’s stock.
Market analysts at Deutsche Bank are predicting that the European market is in the middle of experiencing a strong winter tyre season. After two weak years in Germany, 2009 was strong due to low dealer inventories and good winter conditions, the analysts point out. And if the second run of cold weather and snow affecting the UK and Europe at the moment is anything to go by 2010 is offering the right conditions for increased demand in this sector.
According to a study undertaken by one of India’s leading business magazines, Outlook Business, Apollo Tyres is the tenth highest ranked Indian multinational company in terms of shareholder returns. Apollo is the only tyre manufacturer to appear in the top ten, and according to its 2008-09 financial year results, delivered a 10.5 per cent CAGR return to shareholders. Commenting on Outlook Business’s acknowledgement of the company’s performance, Kankana Das from Apollo Tyres’ corporate relations stated “as a tyre company, we take special pride in being in the top ten.”
As many as a fifth of Kumho Asiana Group executives may face the axe as part of a restructuring arrangement, the Wall Street Journal reported on January 5, The paper added that remaining management could also see their salaries shrink by 20 per cent under the terms of such a deal. The company has already indicated its intention to raise more than KRW 1.3 trillion (£695 million) through the restructuring of its assets, including the Kumho Tire and Kumho Industrial business units. Following the publication of this news the value of Kumho Tire shares plunged 15 per cent, the maximum decrease permitted in a single day.
Nokian Tyres Inc. will raise prices on all of its tyres by 3 to 6 per cent, according to American tyre news source Tire Review. The increase, effective 11 January, 2010, was “due to market conditions and the escalation of raw material costs,” Nokian said.
The Board of Directors of Singapore based Stamford Tyres Corporation has announced the appointment of Dr Wee Li Ann, daughter of company president Wee Kok Wah, as a non-executive director. The appointment took effect on December 9. Dr Wee will, adds Stamford, undertake formal training on her roles and responsibilities as director of a public listed company in Singapore in ‘due course’.
Al Saeedi Middle East FZCO and Al Saeedi Automotive Trading Co, Dubai have received ISO 9001:2008 certification for quality management. They were earlier certified as an ISO 9001:2000 company in year 2005. The Group states that the certificate acknowledges the company’s quality management system based on the process approach, which aims to enhance customer satisfaction by meeting and exceeding customer requirements. The company is the sole distributor of Solideal (solid, pneumatic and industrial tyres) Aufine truck and bus tyres, Maitech off-road radials, Schrader products, Neuton passenger car tyres, and Sicam Tyre equipment.
Pirelli’s intention to acquire an existing facility in Russia have been confirmed by official news of a joint venture agreement signed between the Italian tyre maker and state-owned firm Russian Technologies. According to the December 3 news, the terms of the agreement extend the collaboration to produce tyres and steelcord in Russia to not only include the construction of a plant in the Samara region in the second half of 2010. The 50/50 joint venture agreement will also cover, in Pirelli’s words, an already existing factory “which is currently being identified among some potentially interesting Russian enterprises”. The acquisition will most likely take place in 2010, Pirelli adds.
VAT-registered businesses are being urged to get ready now for major changes to VAT return filing and payment coming next April. HM Revenue & Customs (HMRC) has sent a leaflet to all 1.9 million VAT-registered businesses to alert them to the fact that, from 1 April 2010, those with an annual turnover of £100,000 or more (excluding VAT) will have to file their VAT returns online and pay their VAT electronically. Under the changes, businesses registering for VAT on or after 1 April 2010 will also have to file their return online and pay electronically, whatever their turnover.
Hankook are now the sixth largest tyre manufacturer in Europe, according to company figures. Speaking during a tour of the South Korean-based tyre manufacturer’s Racalmas, Hungary tyre production plant in November, European PR manager, Felix Kinzer, announced that the company now calculates it is the seventh largest tyre maker in the world in terms of units sales; and not far from sixth. Tyres & Accessories' own data, which calculates the rankings based on the value of sales using the euro as the control currency, puts the company in eighth. Algebraical differences aside, the point is that Hankook is gaining ground on its competitors, something that is even clearer when you look at Hankook's take on the current European leaderboard. The company’s calculation puts Hankook in sixth place in the European passenger car tyre market with a 7 per cent market share, snapping at the heels of fifth-placed Pirelli with 8 per cent. Things are even better in the truck and bus tyre business, where the company’s market share has reportedly grown to nine per cent, putting the company in fifth place after Bridgestone (13 per cent), this time ahead of Pirelli (5 per cent). When you consider the rapid growth rates Hankook' sales are currently experiencing, the company's arguably ambitious calculations deserve further attention.
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