Now one of the largest tyre-producing countries in the world, China has an indisputable influence on the direction of global tyre trade. The home of both fast-growing up-and-coming brands as well as a burgeoning domestic market, this tag chronicles China’s involvement with the tyre business.
The popularity of cars such as the Range Rover Evoque has led Jaguar Land Rover to introduce 24-hour working at its Halewood production plant. 1000 new jobs were created to support the new third shift at the plant, which has trebled its workforce in the past three years and staff from the first night shift clocked off on the morning of Tuesday 14 August 2012.
Toyo Tire & Rubber has reported net sales of 120,474 million yen (£980.8 million) for the first quarter of its current financial year, the three months to 30 June 2012. The company’s tyre business unit accounted for 96,448 million yen (£785.2 million) of these sales, 80.1 per cent of the total. Company operating income amounted to 3,529 million yen (£28.7 million), while tyre business operating income was 2,428 million yen (£19.8 million). Total net income came to 1,252 million yen (£10.2 million).
Yokohama Rubber reports a strong increase in both sales and earnings during the first half of 2012. As a result, it says the company is on track to post record sales and earnings for the full fiscal year. Yokohama Rubber has also upwardly revised the fiscal projections it released in February. In releasing its half-year figures, Yokohama also notes that the company shifted from an April to March financial year to a January to December reporting period this year, and therefore formal comparisons of first-half results are impossible. The percent-change figures the company gives are in reference to arbitrary, six-month sums for the same period last year.
Commenting on Bridgestone’s second quarter financials, particularly the operating profit of 133.8 billion yen outstripping guidance of 118 billion yen and expectations of 50 per cent year-on-year growth, Deutsche Bank analyst Takashi Moriwaki says the bank sees “risk for a guidance overshoot as profitability is on an uptrend thanks to stable selling prices and declining raw material costs.”
Operating income and net income at Bridgestone Corporation increased 43 per cent and 39 per cent respectively in the first half of the 2012 fiscal year, the Japanese tyre maker reports. An operating income of 133.7 billion yen (£1.1 billion) and net income of 75.2 billion yen (£614.8 million) were achieved even though net sales only rose two per cent year-on-year to 1,488.9 billion yen (£12.2 billion) during the first half.
According to Bloomberg, China’s consumption of natural rubber will most likely decline this year due to lower demand for commercial vehicle tyres in wake of decreasing truck sales and slowing economic growth. The media company reports Hangzhou Zhongce Rubber Co chairman Shen Jin-Rong as saying consumption may decrease by as much as five per cent.
Production at Tanzanian tyre maker General Tyre East Africa will reportedly resume within a year. Last year management of the company – which hasn’t produced a tyre since 2007 – was placed in the hands of Tanzania’s National Development Corporation, and the corporation’s corporate affairs manager now says that investors from China, Malaysia and South Africa have shown interest in the getting the company up and running again.
The China Rubber Industry Association reports that 83.147 million tyres were produced in China during June 2012; this figure represents a 19 per cent year-on-year growth and an increase of 8.53 per cent over May 2012. During the first six months of 2012, China's tyre production reached 430.53 million units, a growth of 12.3 per cent over the first half of 2011.
With a head office and warehouse complex on a six acre site next to John Lennon airport in Liverpool and offices in Scotland, Ireland and China Kirkby Tyres report that the company remains at the forefront of tyre and wheel wholesaling. In addition to holding a range across sectors, Kirkby offers what it calls a “comprehensive stockholding of off-the-road (OTR) tyres and wheels from manufacturers including Alliance, BKT and Double Coin. There is even talk of double-digit growth despite the tough economic environment.
China’s largest tyre maker, Hangzhou Zhongce Rubber, has become the country’s latest manufacturer to sign up with the Imported Tyre Manufacturers’ Association (ITMA). Its membership gives Hangzhong Zhongce access to the very latest technical and legislative regulations affecting the sale of tyres within Europe.
In addition to reporting its financial results for the quarter ending June 30, at JK Tyre & Industries’ annual general meeting the company shared its plans to acquire natural rubber plantations in Southeast Asia. Vice-chairman and managing director Raghupati Singhania told the broadsheet DNA at the 30 July meeting that the tyre maker has identified plantations of interest in Malaysia, Indonesia and Vietnam and is “now zeroing in on them.” The company intends to source 10 to 15 per cent of its natural rubber from these plantations.
The China Rubber Industry Association reports that Hangzhou Zhongce began work on a new facility in China on June 15. The first phase of the project is expected to be complete by the end of next year, at which the plant will be capable of producing ten million high performance passenger car tyres and light truck tyres. An investment of RMB 2.4 billion (£240.8 million) is required for this initial phase; in total, the project will take six to eight years to complete and involve an investment of RMB 8 billion (£802.9 million). First phase annual sales are expected to reach RMB 4 billion (£401.5 million), growing to over RMB 20 billion when the project is complete.
Guangzhou, China-based newspaper Yangcheng Evening News reports that Kumho intends to capture 15 per cent of China’s high-end tyre market. The newspaper quoted an unknown company source as saying Kumho is increasing its activities in this area, and as part of this it intends to open 350 new retail outlets in China by the end of the year.
On 16 July Sumitomo Rubber Industries officially opened its second tyre factory in China. The Sumitomo Rubber (Hunan) Co. Ltd plant, located in the city of Changsha, is set up for the manufacture of passenger car tyres. Production got underway in July and plant capacity will reach 15,000 units a day by the end of next year. Full stage one capacity of 30,000 units a day is expected to be attained by the end of 2015. A total of some US$297 million is being invested in the 550,000 square metre, 100 per cent Sumitomo-owned facility.
Following earlier reports suggesting Sailun Company Ltd had bought two other Chinese tyre firms, Sailun representatives have confirmed that the Chinese tyre manufacturer has entered into a “framework agreement” to acquire equity in both Shandong Jinyu Industrial Co. Ltd and Shenyang Peace Radial Tyre Manufacturing Co. Ltd. The framework was agreed on 10 July 2012.
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