India
India’s natural rubber exports are said to have increased 38 per cent between April and July this year, according to estimates from the country’s Rubber Board. A total of 23,998 were exported during the period as opposed to 14,816 tonnes in the same period of the previous financial year. Favourable global market conditions in July led to a total of 10,862 tonnes of natural rubber exported during this month alone.
Global number two producer of butyl rubber for use in tyres, Lanxess AG, believes the decline in demand from US tyre manufacturers will more than be compensated for by sales in China and India. CFO Matthias Zachert informed Bloomberg that the company’s experience in the US, where rising fuel prices are prompting motorists to drive less and therefore require fewer tyres, is a ‘relatively moderate decline.’
“The growth rates you have in India and China are, in absolute terms, clearly outpacing whatever little percentage you are going to lose on miles being driven,” he said.
Ceat Limited is reportedly no longer seeking a strategic partner for its planned radial facility in Baroda, India, and is instead receiving technological assistance and know-how from a US based consultancy firm. The tyremaker has sought a partner for assistance in setting up a more than Rs 6 billion (£72.6 million) truck and bus radial factory for more than a year, and in February Sales and Marketing vice-president Arnab Banerjee felt confident enough on the likelihood of this to say that Ceat “should be able to finalise the partners soon.”
Apollo Tyres’ announced expansion plans have been augmented by the appointment of a new chief financial officer. Mr. Salil Gupta, formerly group CFO at Dentsu India, will in his new role oversee the organisation’s finance, taxation and accounts functions – Apollo states that his primary objective is to contribute to the organisation’s financial health and stability, ensuring full compliance with statutory guidelines and the company’s corporate governance policies. His responsibilities also include an advisory role to the company’s legal and secretarial functions.
Tech International, which markets the Truflex/Pang brand of industrial chemical and rubber products, including tyre repair and wheel service products, has made two senior-level appointments.
Firstly, Tim McLaughlin will serve in a consultant role to focus on sales and market share growth in North America. McLaughlin owns and operates his own industrial products distributorship, T. Carson and Company, in Monument, Colorado.
IndianOil, the largest company in India in terms of sales and profit, intends to establish its first styrene butadiene rubber (SBR) facility. This plant, located at Panipat in the north of India and to be built at an investment price of Rs 7.61 billion (£90.55 million), will be 48 per cent owned by IndianOil. The company plans to offer two further investors respective shares of 32 per cent and 20 per cent in the 120,000 tonne per annum emulsion SBR project.
With India’s tyre industry potentially facing a severe shortage of natural rubber, the Automotive Tyre Manufacturers’ Association (ATMA) has repeated its demand for the immediate duty-free importation of 100,000 tonnes of natural rubber.
The industry, which consumes 57 per cent of India’s domestically produced natural rubber, is said to be in the midst of its worst ever raw material availability crisis. The Hindu Business Line quotes ATMA director general Rajiv Budhraja as saying during the final days of July 2008 the availability of sheet rubber to the tyre industry has been ‘woefully inadequate’. Mr. Budhraja added that, as domestic natural rubber prices are even higher than those on the international market, the commodity now accounts for 41 per cent of the tyre industry’s raw material costs.
India’s largest carbon black producer, Phillips Carbon Black Ltd, plans to establish a fourth facility and expand capacity at two existing plants, those at Baroda and Durgapur. Following the company’s recent AGM, company chairman Sanjeev Goenka indicated another facility, or alternatively a further acquisition of capacity, may be necessary now that existing capacity at the three factories in fully utilised. This fourth greenfield plant, should the company choose to take this option, may be located either within India or overseas.
India’s state run MMTC trading company appears to be progressing with its plan to import and market Chinese commercial vehicle tyres in India. According to reports, the company has already identified a US-based tyre manufacturer with a production site in China as the possible source of tyre imports on an ongoing basis. The initial volume order is anticipated to be placed in September or October.
The US based company has not been specifically named, however sources say the firm first entered China in 2006 and recently acquired a production facility there. The company was incorporated in 2005 through a series of mergers and also has production bases in Europe and North America.
Increasing raw material and personnel costs are said to be two of the key factors behind lower net profits for India’s MRF in the financial year’s third quarter. In the three months to June 30, 2008 the Chennai based company experienced a 25 per cent drop in net profits from the corresponding quarter a year earlier, to Rs 318.6 million (£3.74 million). Net profits for the nine months of the current financial year stand at Rs 1.492 billion (£17.5 million), an increase of 39.2 per cent.
With a view to maximise the opportunities present in emerging nations, Taiwan based SBR (styrene butadiene rubber) and BR (polybutadiene rubber) manufacturer TSRC Corporation plans to establish facilities in India and Vietnam. TSRC president W.H. Tu said the company is considering setting up factories in these two countries as both possess a booming automotive industry but lack an upstream raw material supply of SBR and BR. In addition, TSRC is also studying the feasibility of establishing a plant in the Middle East due to regional advantage of low-price raw materials for the production of SBR and BR.
Tyre manufacturers and other users of natural rubber in India may face a supply bottleneck due to the country’s declining natural rubber replantation rate during the past four years. According to a report in India’s The Economic Times newspaper, the rising price of natural rubber has created a reluctance amongst rubber growers to re-plant; trees cannot be tapped for rubber during their first seven years of life, so farmers are avoiding replantation where possible and are continuing to tap older trees. Although this provides greater funds at present, a question mark hangs over future supply as both the quantity and quality of latex produced by older trees is inferior to that of younger trees.
The Ruia Group of Kolkata, India has revealed plans to local news sources that they are to build a new tyre plant on a Greenfield site near the Lokpriya Gopinath Bordoloi International airport in Guwahati. The site is currently being prepared for industrial development by local government and Ruia looks set to invest heavily, with four billion rupees earmarked for the project in the next year and a half.
The company expects the facility to open with a production capacity of 50 tonnes per day initially. Ruia hopes to double that figure over time.
Michelin Training Centre is celebrating delivering its 500,000th hour of high training. The centre, which is close to Michelin’s UK headquarters in Campbell Road, Stoke-on-Trent, was set up at the start of 2002 and sees an average of over 3,000 people from all over the world come through its doors each year. The modern teaching environment provides both internal and external training on everything from basic time management to tyre related aspects of crash scene investigation.
In addition to the company’s own manufacturing and business staff, Michelin’s Training Centre is used by organisations such as the Police, the MOD and retailers to train staff about tyre design, construction and performance. The amount of training now being held at the Centre is being seen as a good indicator of how important Michelin believes the MTC will be for its ongoing success.
Continental has launched an electronic components manufacturing plant in India’s IT hub. The production line will cater to the needs of the expanding auto-market on the subcontinent. The facility, which is located in a greenbelt location in Bangalore, is a high-tech venture including a research and development wing, costing the company in the vicinity of 2.2 billion rupees.
Speaking to journalists at the launch, Jay Kunkel – President Asia for the company – said that the firm has been planning to set up a retail and distribution system in Indian and – while there are no concrete plans – that the German giant would look into the feasibility of a manufacturing unit. The company is looking to provide tyres for the high-end segment of after-market sales in India.
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