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.
Due to softer demand for carbon black in North America, Columbian Chemicals announced on November 12 that it will close its production facilities in Marshall, West Virginia, on or around January 31, 2009. Approximately 55 jobs will be lost as a result of the closure.
Yokohama Rubber has announced experiencing a 53.7 per cent decline in operating income for the six months to September 30, 2008 in comparison to the same period of the previous year, to 5.6 billion yen (£37.7 million), despite a 1.3 per cent increase in net sales, to 256.6 billion yen (1.7 billion). Net income for this first half of the current financial year declined 95.7 per cent, to 554 million yen (£3.7 million). For the three months ending September 30, 2008, net sales were 133.5 billion yen (£898.8 million), an increase of 1.8 per cent. Operating income decreased 81 per cent to 1.5 billion yen (£10.1 million) and net income dropped from 29.5 million yen (£198,600) in 2007 to a loss of 7.03 million yen (-£47,000) in the recently concluded quarter of this year.
China Automotive Systems, a power steering components and systems supplier in China, has its first purchase order for power steering gears from a global automotive manufacturer headquartered in North America, says Aftermarket News. This first purchase order is part of a larger agreement to supply power steering gears to this automotive manufacturer.
This agreement represents a major milestone for the company, said CEO Qizhou Wu, as it is the first contract for China Automotive Systems in the North American original equipment manufacturer market. These power steering gears are intended for one model of a well-known automobile brand, according to the company.
Smithers Scientific Services Inc. (SSS) has published a “Tire Industry in China” research report. The 246-page paper was initially released simultaneously at CITExpo in Shanghai and ITEC in Akron, Ohio in September.
Cooper Tire & Rubber has reported a net loss of US$55 million, or 94 cents per share, for the financial quarter that ended September 30, 2008. This result contrasts markedly from the company’s result for the same period in 2007, in which it recorded a net profit of $30.2 million. The company says its results were pressured by unprecedented raw material cost increases, higher utility costs, and production curtailments due to raw material shortages caused by hurricanes in the Gulf Coast region.
In the first nine months of 2008 Bekaert achieved consolidated sales of 2.047 billion euros and combined sales of 3.119 billion euros, an increase of 28.8 per cent and 24.0 per cent respectively. Bekaert reports that organic growth accounted for a growth in consolidated sales of 24.7 per cent, largely driven by the passed on raw material price rises, and the net movement in acquisitions and divestments in Vicson (Venezuela) and in Proalco (Colombia) accounted for 7.9 per cent. Exchange rate fluctuations tempered the growth by 3.8 per cent.
According to South Korea’s Yonhap news service, the production of truck and bus tyres began today at Kumho Tire’s new facility in China. The US$100 million plant in Nanjing has a capacity to produce 300,000 bus and truck tyres per annum, the company said in a statement.
According to one US newspaper, Cooper Tire & Rubber is expected to announce by January 19 which of its four US factories faces closure. The Northeast Mississippi Daily Journal reports that the unionised Findlay and Texarkana, and the non-union Albany and Tupelo plants have been, or are to be, visited by Cooper officials, with information packages on each facility to be delivered to the company by December 1.
The Performance Butadiene Rubbers business unit belonging to Lanxess AG and Taiwanese tyre manufacturer Cheng Shin Rubber have put their cooperation on a firm footing with the conclusion of a long-term supply agreement. Over the next four years Lanxess will supply solution SBR and polybutadiene rubber to Cheng Shin, and the company plans to nearly double the volume of high-performance rubber it supplies over this period.
Producers of styrene-butadiene rubber (SBR) and polybutadiene rubber (BR) in parts of China are reporting weakening downstream demand due to cutbacks in the tyre industry. One unnamed large tyre manufacturer in Guangdong province has recently shut down operations at its factory, and several other manufacturers in Zhejiang and Anhui provinces have cut operating rates by 50 to 60 per cent due to a lack of cash and poor sales, trade and produce sources claim.
Belgium’s Bekaert Group and China’s Angang Steel Company are reported to have formerly established a joint venture company on October 30. Called Angang Bekaert Tire Cord Co, the new venture is situated in Chongqing’s Shuangqiao Industrial Park and will engage in wire rod processing and the production of tyre cord for the domestic market.
Official figures now put attendance at this year’s CITExpo at 6860 visitors and 311 exhibitors. With at least three main tyre exhibitions operating in China, not to mention a tyre recycling and retreading fair, other related rubber conferences, and other exhibitions in the Far East T&A asked if there will be a kind of consolidation in the show sector, with the more provincial exhibitions ceasing to be international scale events. Wilko Fong, director of CITExpo organisers, Reliable Exhibitions, shied away from commenting on the relative success of other exhibitions. Instead he preferred to quantify CITExpo’s success on its own merits: “CITExpo is now a mature show and while it is still growing now, after 6 years future growth is likely to level off and mature. The show is likely to become a more regular established show for tyres.”
CITExpo has a character of its own. There may not have been a full complement of the top 10 Chinese tyre manufacturers present at the 2008 show, but large scale manufacturers such as Triangle and Sibur took very significant sized stands. Sibur’s reasoning for its involvement with CITExpo was particularly telling. Bearing in mind the fact that, at present, the large Russian manufacturer generally exports economy-orientated truck tyres, China (home to probably the largest manufacturing base for this level of products in the world) is unlikely to be the end destination the company was aiming to reach. In stead Sibur invested in exhibiting at CITExpo in order to meet European buyers sent east to procure next year’s stocks.
Harvey Brodsky, managing director of the US based Tire Retread & Repair Information Bureau (TRIB), will be a featured speaker at the Reifen China exhibition to be held in Shanghai, between December 4 and 6. Brodsky’s first presentation, titled ‘The Economic and Environmental Benefits The Retread Industry Can Offer in China’, will take place on December 4, and his second presentation, ‘The Importance of Being Ethical in Your Business Dealings with Truckers and Other Users of Your Retreads’, will take place on December 5.
“We are honoured to have been invited to make TRIB’s activities known to the Chinese retread industry and I am pleased to be able to represent TRIB members by making my two presentations.” said Brodsky.
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Automotive emission control and ride control products manufacturer Tenneco Inc. is to restructure its global operations. In an announcement made on October 29, the company said it would further reduce structural costs and capacity in response to the worsening industry downturn. Approximately 1,100 jobs will be axed as a result of the restructuring and five facilities closed. In total Tenneco expects to generate around US$64 million in annual savings once all changes are fully implemented.
Following an announcement from Cooper Tire that it would conduct a study into its US manufacturing facilities, local, state and national USW union leaders and about 80 others joined together in Findlay, Ohio to present their response – they want Cooper to continue production at its Findlay factory, and jobs should remain in the US.
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