Tyre and wheel business news from the segment’s most important companies.
As he prepares for a conference call on May 23 to discuss his company’s first quarter 2011 results, Titan International chairman and CEO Morry Taylor, offered a revised outlook for the remainder of the year.
At its May 20 meeting, Yokohama Rubber’s Board of Directors decide in favour of the promotion announced by the previous Board of company president Tadanobu Nagumo to the role of chairman and CEO. Nagumo maintains his role as representative director. Taking his place as president is Hikomitsu Noji, currently director and senior managing corporate officer, and president of the Yokohama’s Tire Group; Noji will continue serving in this last-mentioned capacity. These and other promotions decided upon at the meeting will be formally approved at the company’s general meeting of shareholders on June 29.
During the 2011 fiscal year, which in Japan began on April 1, 2010, net sales at Yokohama Rubber increased 11.4 per cent year-on-year to 519.7 billion yen (£3.9 billion); leading this sales growth were tyres and hose, sealant and adhesive products, and the company reports it “reinforced its sales momentum” through successfully implementing price increases that offset the effect of rising raw material costs and the appreciation of the yen. Operating income increased 37.5 per cent to 29.5 billion yen (£223.0 million) and net income grew 21.2 per cent to 13.9 billion yen (£105.1 million).
Following a two year recession-related delay, plans for German specialty chemicals group Lanxess to transfer its corporate headquarters from Leverkusen to the nearby city of Cologne are back on track. More than 1,000 Lanxess employees will make the 15 kilometre move to a newly renovated 22-storey building in the second half of 2013; the new headquarters’ opening will bring almost all the company’s management functions under one roof.
A new major player may be set to enter the global rubber industry: India’s Reliance Industries (RIL) intends to invest in building up a rubber business to meet growing demand in Asia. "We are developing a whole new rubber business,” company chairman Mukesh Ambani told India’s Economic Times. “We will make RIL one of the world's largest players in rubber as the whole tyre industry moves to Asia. The big trend is that if you look at next ten years, the projections for automobile growth is all China, India and Asia focused." In total, RIL plans to invest some US$10 to $12 billion in its chemical business to strengthen the company’s portfolio in a number of sectors.
DuPont’s acquisition of Danisco has been finalised. On May 16 the chemical company reported that its wholly-owned subsidiary DuPont Denmark Holding ApS had taken on 92.2 per cent of Danisco’s outstanding shares, having paid 700 krone (£82) per share. Following the acquisition’s finalisation DuPont CEO and chair Ellen Kullman said “we are delighted that the tender has been successful and we can move on to the process of integrating Danisco into DuPont.” Danisco chairman Jorgen Tandrup added the Danish company is “very pleased that a vast majority of Danisco shareholders have accepted DuPont's offer” and commented on the two companies’ shared outlook on science and research capabilities.
The newly-released annual report from YHI International states the Singapore-based wheel manufacturer and automotive components distributor is embarking on a “new exciting era.” Specifically, the company has begun a five-year expansion plan to grow its manufacturing and distribution segments and achieve sales of S$1 billion (£494 million) by the 2015 financial year.
At the Michelin Annual Shareholders’ Meeting on May 13, the French manufacturer reported its position strengthened in every geography during 2010 and particularly in mature markets. “Last year at this same time we were observing how the exceptional crisis of 2009 had had an impact on our business,” observed Michelin managing general partner Jean-Dominique Senard. “I think that this year we need to admit that the 2010 context is different and it was a buoyant situation. We had a much stronger market recovery than we could have envisioned at the time.”
A combination of successfully implemented cost-cutting initiatives plus increased tyre prices in international markets are behind Bridgestone Corporation’s release of revised consolidated financial projections for the fiscal year ending December 31, 2011. The Japanese tyre maker now expects to achieve net sales of 1,480,000 million yen (£11.2 billion) during the first half of the current financial year and 3,190,000 million yen (£24.1 billion) for the full year to December 31 – an increase of 10,000 million yen on the projected figures released on February 18. Operating income for the first half has been bumped up to 72,000 million yen (£544.7 million) and 167,000 million yen (£1.3 billion) for the full year, both 27,000 million yen more than projected in February. Ordinary income projections for the half and full year have both also been upwardly revised 27,000 million yen, to 64,000 million yen (£484.2 billion) and 151,000 million yen (£1.1 billion) respectively. Projected net income for the half and full year has been increased by 12,000 million yen to 35,000 million yen (£264.8 million) and 94,000 million yen (£711.1 million).
The year has started well for Lanxess. After achieving what it calls its “best-ever quarterly result in the first quarter,” the German specialty chemical company says it is on track to achieve EBITA pre-exceptionals in excess of one billion euros in 2011; during the first quarter its EBITA pre-exceptionals rose 38 per cent year-on-year to 322 million euros, with double-digit growth recorded in all its segments and regions. The company’s sales increased 29 per cent year-on-year in the three months to March 31, 2011 due to higher volumes and price increases that helped offset rising raw material costs. EBITDA margin pre exceptionals rose to 15.5 per cent in the first quarter from 14.4 per cent a year earlier and net profit increased 60 per cent year-on-year to 166 million euros.
Last year saw an upturn in global tyre markets following the slump of 2008 and 2009, and in presenting the 2010 annual report for Turkish tyre maker Brisa Bridgestone Sabanci Tire Manufacturing and Trading, chairperson Güler Sabanci said “Brisa reacted to this positive turn as efficiently as it reacted to the sudden deterioration that was previously caused by the harsh effects of the global financial turmoil; and managed the increase of demand in a brilliant fashion.”
Consolidated quarterly figures for Sumitomo Rubber Industries show the Japanese manufacturer to have earned 145,072 million yen (£1.1 billion) in net sales during the three months to March 31, 2011, a year-on-year increase of 8.2 per cent. Tyre sales accounted for 85.7 per cent per cent of this total, or 124,316 million yen (£942.5 million), a rise of 11.4 per cent compared with the corresponding quarter of 2010. Yet although sales were up during the quarter, operating income was down 0.6 per cent to 9,711 million yen (£73.6 million) and net income decreased 16.7 per cent to 4,242 million yen (£32.2 million). Operating income for the company’s tyre business was 8,465 million yen (£64.2 million) a year-on-year increase of 17.4 per cent.
Diminished profits are the order of the day in Ceat Ltd’s audited financial results for the financial year ended March 31, 2011. Performance in the final quarter impacted on the Indian manufacturer’s performance, and despite annual income growing 24.2 per cent to Rs 35163.3 million (£477.3 million), annual net profit plummeted from Rs 1610.3 million at the end of 2010 to Rs 222.8 million (£3.0 million).
Despite a slight increase in net sales and a significant jump in operating income, during the financial year ending March 31, 2011 Toyo Tire & Rubber reported a net income significantly lower than in the previous 12-month period; its net income of 521 million yen (£3.9 million) was 2,436 million yen or 82.4 per cent lower than a year earlier. During the year net sales increased 2.2 per cent to 294,092 million yen (£2.2 billion) and operating income was up 40.6 per cent to 12,182 million yen (£92.4 million). Annual ordinary income amounted to 9,193 million yen (£69.7 million) and was 2.4 per cent higher than in the previous year.
Indonesia’s Gajah Tunggal has reported a net profit of Rp 332 billion (£23.4 million) in the first quarter of 2011, a 35 per cent year-on-year and 182 per cent quarter-on-quarter increase. This result is “well above” Deutsche Bank’s consensus (the bank’s equity research analysts comments that it is equal to 40 per cent of consensus and 43 per cent of its full year 2011 forecast). Much of this growth was, however, from foreign exchange gains and associates. Core net profit, excluding foreign exchange and associates, was Rp 181 billion (£12.8 million) – relatively unchanged from the first quarter of 2010 and a quarter-on-quarter increase of 60 per cent.
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