Tyre and wheel business news from the segment’s most important companies.
Upon releasing chemical manufacturer Lanxess AG’s financial results for the second quarter of 2010, the company’s Board of Management chairman Axel Heitmann commented on the ten best-selling Lanxess products: “This list features eight rubber products from the Butyl Rubber and Performance Butadiene Rubbers business units for the manufacture of tyres,” he stated.
On June 23rd 2010, VMI Yantai achieved ISO9001:2008 certification from Lloyd Register Company. This successful certification of the company’s Chinese operation, says the VMI Group, was accomplished in close cooperation between VMI Yantai and the company’s Netherlands based organisation. “The ISO9001:2008 certificate demonstrates the high quality level of the VMI products that are being produced by VMI in Yantai as well as in the Netherlands,” announced a company statement.
In reporting its financial results for the first half of the 2010 financial year, Germany’s Delticom AG – the company behind mytyres.co.uk – observed a marked difference between the performance of its main e-commerce business and its comparatively small-scale wholesale operation. Delticom notes the continuation of the global economic recovery during the first and an improvement in conditions in most European countries, yet has also seen that within the “strong rebound” in its home market Germany domestic demand has lagged behind the improving consumer sentiment. Therefore, while the internet is “steadily gaining significance as a sales channel”, Delticom states that the late-cycle retail sector as a whole “has not yet been able to benefit from the upturn to the same extent as other sectors of the economy.”
For Bridgestone, the first half of the 2010 financial year presented an operating environment “plagued by rising prices for raw materials.” Yet, despite these challenges, the Japanese tyre maker saw signs of a slight recovery in its domestic market plus a gradual recovery in the US and accelerated recovery in Asia and particularly in China. Bridgestone acknowledges that conditions in Europe remain “challenging”, but notes that the business climate there showed signs of bottoming out. In these operating conditions, Bridgestone states that during the six months to June 30, 2010 it stepped up efforts to improve manufacturing productivity, increase sales of highly competitive products, strengthen supply capacity and effectively utilise its management resources.
On August 1 the German tyre component manufacturer Gumasol-Werke Dr. Mayer GmbH & Co. KG became a subsidiary of India’s Ruia Group. The firm will continue operation at its site in the Rhineland-Palatinate town of Germersheim under the name Gumasol Rubber-Tec GmbH and all 110 jobs at the plant have been retained. Gumasol describes its acquisition by the Ruia Group as “a new chapter” for a company “rich in tradition”, and comments that the incorporation of a previously medium-sized firm into an international enterprise “offers very good perspectives for Gumasol-Werke.”
During the first quarter of the 2010 financial year, Toyo Rubber received net sales of 72,162 million yen (£528.2 million), a 15.7 per cent increase on the same period last year. This increase in sales was matched by a 13 per cent increase in global tyre sales by volume, with a total of 43,700 tonnes of tyres produced in the three months to June 30, 2010. The bulk of this, 37,500 tonnes, was destined for the Japanese market. Operating income for the quarter was 2,612 million yen (£19.1 million), compared with an operating loss of 3,054 million yen a year earlier, and net income amounted to 743 million yen (£5.4 million) compared with a net loss of 2,620 million yen in the same period of 2009.
Net sales at Nokian Tyres rose 36.3 per cent year-on-year during the second quarter of 2010 to 260.4 million euros, giving the Finnish tyre maker total net sales of 444.2 million euros in the current financial year – an increase of 28.1 per cent over the first half of 2009. Operating profit for the quarter was 60.9 million euros, a year-on-year growth of 200 per cent, while operating profit for the first half stood at 82.0 million euros, up 369 per cent on the corresponding period of last year. Second quarter net profit amounted to 52.6 million euros, a growth of 342 per cent on the 11.9 million euro profit in quarter two of 2009. Profits for the first two quarters total 72.6 million euros, an impressive 4,740 per cent increase on the 1.5 million euro profit reached in the first half of the 2009 fiscal year.
Following a less than optimal 2009 Kumho Tires has achieved positive results for the second consecutive quarter of this year. The South Korean manufacturer’s revenue increased 34 per cent year-on-year during the second quarter of 2010 to KRW 628.1 billion (£336.1 million), with operating profit reaching KRW 66.9 billion (£35.8 million) and an operating profit margin of 10.7 per cent. Net profit for the three months to June 30 was KRW 53.9 billion (£28.8 million), contrasting with a loss of KRW 113.2 billion a year earlier.
During the second quarter of 2010 Hankook Tire’s sales in Europe put the tyre maker in a good position to achieve its growth goals within the region. Year-on-year growth in the three months to June 30 was 17.8 per cent, with sales of products from its Dunaújváros plant in Hungary increasing 20.3 per cent year-on-year following a 17 per cent year-on-year growth in the first quarter.
Indonesia’s largest tyre manufacturer, PT Gajah Tunggal Tbk, has reported a 188 per cent increase in net profit during the first half of the current financial year. During the six months to June 30, 2010, the company attained profits of Rp 415 billion (£29.3 million) on the back of revenues equalling Rp 4.8 trillion (£339.8 million), a 27 per cent year-on-year increase. Operating profit jumped 176 per cent to Rp668 billion (£47.3 million) due to a decrease in operating expenses.
According to company president and chief executive officer Richard J. Kramer, Goodyear “pulled the right levers” during the economic downturn and is thus well positioned for growth opportunities presented by the recovery. “During the second quarter, we achieved significant progress across all our businesses, driven by a combination of sales growth and cost actions,” said Kramer during a conference call on July 29. “Versus the comparable prior year period, sales were up 15 per cent, units up 10 per cent and segment operating income was $219 million, an improvement of more than $190 million from the second quarter 2009.”
Figures released by Pirelli and Michelin show growth in on-road tyre markets across all global regions during June 2010. The Italian and French tyre makers respectively estimated growth in Europe’s OE passenger car tyre market to be nine per cent and 8.9 per cent during the month, with year to date growth in this segment given as 22 per cent and 25.2 per cent. For the European replacement segment, Pirelli and Michelin report June market growth to have been 11 per cent and 9.8 per cent respectively, with year to date growth figures exactly the same for both companies. Within Europe the OE truck tyre market is estimated by Pirelli to have grown 69 per cent year-on-year in June, while Michelin logs a 74.7 per cent growth for the month. Year to date growth is given as 30 per cent and 28.7 per cent. According to Pirelli European replacement market truck tyre sales grew 20 per cent in June, with Michelin providing a very similar figure of 19.7 per cent. Year to date, Pirelli and Michelin estimate growth in this segment to be 27 per cent and 28.7 per cent respectively.
The 2009-10 financial year was, for Apollo Tyres, a year in which the company “walked new geographies, met different people, mingled with various cultures, learnt new lessons, and have been amply rewarded for our keenness to explore newer pastures and challenges.” These words from company chairman Onkar S Kanwar describe a period of massive change for the tyre maker, a time of transition that has seen Apollo emerge as an entity operating on a global level.
The chairman and CEO of Titan International has described the second quarter as a “good quarter for a number of reasons. Maurice M. Taylor Jr, a man also known as “The Grizz” – a nickname presumably earned due to his business style rather than a fondness for bears – said “the numbers speak for themselves. If you look at the cash flow you will see that there is about an extra $1 million each quarter in depreciation and amortisation related to the new off-the-road equipment when compared to the same quarters in 2009.”
In the words of Continental AG’s Executive Board chairman Dr. Elmar Degenhart, the German tyre and automotive systems manufacturer “is well on its way to emerging from the crisis stronger than before.” In particular, the company’s EBIT has developed positively and the EBIT margin exceeded pre-crisis levels during the first half of 2010. “This is also however obvious from our balance sheet, which we have improved substantially since the beginning of the year with the capital increase and the equally successful placement of an initial bond, as announced,” Degenhart added. “With this basis, we are tackling the upcoming tasks brimming with confidence.”
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