Analysts MorganStanley have upgraded Nokian shares from “Underweight-V” to “Equal Weight-V”. This follows good first quarter financial figures and the company’s reorganised strategy to pursue growth in the Russian tyre market, which involves investing 52 million Euro in building a new factory near St. Petersburg.
200 jobs are to go from a total workforce of 1,150 at Continental’s factory at Mayfield, Kentucky. The losses will be implemented at the beginning of July, as production is reduced from 10,900 tyres a day to 7,300. Continental operates five factories in the USA and Mexico, employing a total of 10,500 and the company has said that it has no plans to axe a factory.
Marangoni Tread’s factory at Madison, Tennessee has begun producing Ringtread spliceless precure tread rings. The timing is impeccable, as Marangoni’s business in North America continues to grow, with this year so far 50 per cent higher than 2003. The 50,000 square foot factory is part of a $10 million investment by Marangoni in US manufacturing, supplying the 15 Ringtread dealers currently operating in North America.
Slovak tyre manufacturer Matador is set to sign a joint venture agreement with Ethiopian firm Addis Tyre. Details are sketchy, but it is believed that Matador will pay around US$ 10 million for a stake in Addis of between 60 to 76 per cent. The Addis factory was built in 1971 by a company from what was then Czechoslovakia and produces 100,000 tyres annually for the local market. Matador will upgrade technology and equipment with the aim of tripling output by 2006.
Superior Industries is to build a new wheel-manufacturing plant in Mexico, with construction starting this year and production beginning in mid-2006. Mexico was chosen because of cheaper labour costs, although the factory is expected to have a high degree of automation. Estimated cost of the plant is $60-80 million and it will have an annual production capacity of 2.5 million wheels.
Sakip Sabanci passed away at 6:00 am on Saturday 10th April, following a long battle against cancer. He was 71. As head of the Sabanci group, he presided over the establishment of Lassa in 1974 and the later joint venture with Bridgestone in 1988, as a result of which the company name changed to Brisa. A new factory was built at Izmit and production began in November 1990. Married with three children, he was the author of 13 books and, during his lifetime, was awarded no fewer than 11 honorary doctorates by Turkish and US universities. Other awards include the Crystal Globe by the European Economic Institute and the Turkish State Distinguished Service Medal. In 1999 Sakip Sabanci was elected “Businessman of the Year” by the FABSIT foundation in New York and was given the “Award for promoting Turkey” by the Turkish-American Businessman Association. With an estimated fortune of 2.65 billion Euro, he was reckoned to be Turkey’s richest man.
In June, Goodyear will exercise its option to acquire the remaining 20 per cent of Slovenian tyre manufacturer Sava for approximately US$ 52 million. Goodyear originally purchased 60 per cent of Sava in 1988, acquiring another 20 per cent four years later. So far Goodyear has invested in excess of US$ 100 million in modernisation. Last year, the Sava factory at Kranj produced over seven million tyres for cars, light trucks and commercial vehicles. More than 80 per cent of these were exported, to 70 countries.
Nokian has announced its intention to terminate the Joint Venture with Russian company, Amtel. Under the terms of the agreement Amtel produced Nokian’s intermediate brand, Nordman. Nokian has established its own logistical centre in the Moscow area and is now concentrating its marketing strategy on the Nokian brand alone. The company is building a new tyre factory close to St. Petersburg. It is expected that this factory will commence production in 2005.
Hankook Tire Manufacturing Co Ltd is considering investing up to 500 million Dolars to build a plant in the Czech Republic. This follows the decision of Hyundai to build cars in Slovakia. The area is rapidly becoming the centre of the new European automotive industry. Hankook Tire may be looking at other countries in the region but they are clearly considering the Czech Republic as an option. Hyundai announced on Tuesday that it will set up its factory in the north western city of Zilina, about 30 km from the border with the Czech Republic, where a number of foreign car part makers are already present.
Deja vu for Bridgestone as the company recalls some Steeltex tyres including 297,000 tyres on Ford Excursion sport-utility vehicles following at least five fatalities. The Steeltex Radial A/T tyres were made at a factory in Joliette, Quebec, from March 1999 through December 2002, the tyremaker said. The tyres will be replaced without charge, Firestone said. The Steeltex tyres fail “in a situation where the vehicle is overloaded or the tyre is way under-inflated,” Firestone spokesman Dan MacDonald said. One of the fatal accidents involved a vehicle hauling a trailer that lost control, while in another the sport-utility vehicle was loaded with 1,500 pounds of bottled water, he said. The NHTSA twice previously investigated Steeltex tyres without finding any defects.
Through its quality monitoring process, Michelin has come to the conclusion that a limited number of tyres within this production range may present, under Australian conditions of use, a risk of reduced robustness in the crown area, which may lead to a rapid loss of air pressure. As a consequence of this the company is recalling 10,000 tyres manufactured at Michelin’s truck tyre factory in Thailand between January 2003 and September 2003. The designated tyre is the Michelin brand 295/80 R22.5 XZE2+ TL 152/148M.
Slovakia’s chances of becoming big in the automotive industry are strong, according to Jan Bajanek, head of the Slovak Investment and Trade Development Agency, as several Japanese, British, and US firms are considering Slovakia as the possible site for their new plants. Bajanek said to the state-run TASR news agency that a major US producer of trucks was considering investing 400 million dollars into a factory in Slovakia that would create 2,000 jobs. According to Bajanek, Slovakia is still in a good position for the Hyundai investment, and other Asian car producers, such as Mazda and Honda, are also considering coming to Slovakia whilst Rover and the Japanese tyremaker Bridgestone are considering investing in Slovakia, Bajanek said. All good news for Matador’s automotive products division.
A fire that started early Wednesday at a tire factory owned by Goodyear (Thailand) PCL damaged a raw material warehouse, but other operations weren’t affected, a policeman told Dow Jones Newswires.
Bridgestone plans to set up a plant in India that will make truck radials and help it establish a firm foothold in the country, the world’s fifth biggest tyre market. The tyre manufacturer’s local unit, Bridgestone ACC India, currently manufactures radial tyres for passenger cars and small vans at a factory located near Indore in Madhya Pradesh. Sources said Bridgestone officials are preparing a project report on the size of production capacity and investments required to set up the plant, which will take around 18-24 months to build.
Polyester fibre manufacturer KoSa, with regional headquarters in Charlotte South Carolina, will buy Michelin’s textile factory in Winnsboro. The site, which has 185 employees, makes and treats polyester fabric used in tyre manufacturing. The agreement includes a multi-year contract in which KoSa will supply Michelin with fabric for its tyre-making operations.
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