Whether its raw materials, machinery, research and development or the latest manufacturing trends, this tag provides up-to-the-minute insights into the upstream part of the tyre industry.
Jon Rich, president of Goodyear Tire & Rubber’s North American division, is “extremely bullish” about 2005, according to a Tire Review report. “New products are going to be the lifeblood of the new Goodyear,” Mr Rich, told delegates at the company’s annual dealer meeting in Dallas. The theme of this year’s conference is “capture the moment, create the future,” assuring dealers there was more to come.
Reiff Reifen & Autotechnik (Germany) gave up the production of retreaded passenger car tyres at the end of December 2004, because it was not making a good enough return on its investment. The Condor tyres it produced were a well-known brand and the Reiff manufacturing plant, built only five years ago, was considered the “most modern in the world.” What caused the degeneration of such a promising business model?
The future of western European car manufacturing is at risk unless the industry takes steps to improve its international competitiveness, a senior Ford executive has warned.
“The fact of the matter is, these days it is not a very competitive place to do business,” said Mark Fields, executive vice president of Ford’s Premier Automotive Group.
Degussa has begun plans for a fourth production line at its carbon black plant in Qingdao, even though its third line is still under construction. The German company will significantly increase its manufacturing capacity in China with the new investment.
“After completion of our current expansion projects we will be able to produce more than 100,000 metric tons of carbon black,” said Robert Wissner, head of Degussa’s Fillers & Pigments Business Unit.
Michelin reached the 20 million tyre mark at its Waterville plant in Nova Scotia, on Friday.
To mark the occasion the manufacturer donated $1,000 each to 20 local charities chosen by the 1,100 employees, reports Canada east.
Beissbarth UK has been awarded the Institute of Transport Management’s (ITM) ‘UK Company of the Year 2004/5’ accreditation.
This is the second award to be received by the company within the space of six months. After winning the industry’s equipment provider award of 2004 ‘Best Garage Equipment Provider.’
The executive boards of the United Steelworkers of America (USWA) and the Paper, Allied Industrial, Chemical and Energy Workers International Union (PACE) have unanimously voted to merge. According to the USWA the merger of the two organisations will create the largest industrial union in North America, with over 1.25 million active and retired members. The union also reports that it will have over 8,000 bargaining units in the US, Canada and the Caribbean.
The new union will be called the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union. PACE and USWA members will vote on the proposed merger at conventions to be held in April.
Plimsoll’s latest report issues good news for the UK tyre manufacturers and distributors industry by announcing that the value of 59 per cent of companies in the industry has increased in the last 12 months, some by as much as 50 per cent.
David Pattison, senior analyst at Plimsoll, explains: “Having valued many companies in the UK tyre manufacturers and distributors industry in the last two years, I am amazed that despite poor margins and low growth being commonplace in the market, so many of them have managed to increase in value. While 16 per cent of companies saw no change, only 25 per cent of the industry suffered a fall in value.”
Major French car manufacturers, Renault and Peugeot have selected Bridgestone for original equipment, the company has announced. Both manufacturers will fit 15 inch tyres to their new high-volume small cars.
India’s strong tyre manufacturing base dates back over five decades. With a current production level of about 55 million tyres the country’s industry is expected to grow seven to eight per cent per annum in the near future, according to market insiders. Increases in domestic demand and exports will bring about a change in the landscape of Indian manufacturers which can already be characterised as an oligopoly, with few dominating players among dozens of competitiors. In order to comprehend the changing realities of the Indian market it is important to have a close look at the companies involved and major trends. The years to come will witness many changes – however the eventual outcome is still open for change.
Large-scale Indian tyre manufacturer, Apollo Tyres, is investing 2.5 billion rupees (more than £30 million) in production expansion and is aiming to export more to the European market, Indian news sources are reporting. Company chairman and managing director Onkar S Kanwar told Financial Express: “We are looking at investing [2.5 billion rupees] in the existing facilities in the next fiscal ending March 2006.” Mr Kanwar explained that nearly half of the spending would be pumped into the Gujarat unit alone. “This calendar, we are more aggressively looking at tapping the European market. This can be through direct marketing or even through distribution alliances,” he added. At the moment the company makes between 15 and 20 per cent of its revenues from exports to other countries besides Japan and Europe.
Apollo Tyres also recently entered into a joint venture with Michelin. The joint venture, Michelin Apollo Tyre Pvt Ltd, is focusing on manufacturing, marketing and sales of truck and bus radial tyres. “In the first phase, we will manufacture truck and bus radials and sell under the Michelin and Apollo brand. These products will be sold across the country,” he said.
Bridgestone Corporation has told the Financial Times that it is reviewing its European operations with a view to increasing production in this area. “We are undertaking a study of what might be built and where,” said Bridgestone Europe’s chairman and chief executive, Minekazu Fujimura.
According to the business newspaper, Europe accounts for 12.5 per cent of Bridgestone’s global sales, which are expected to be to total more than $17 billion last year for 2004. Bridgestone is suggesting that any new manufacturing capacity will be located in Central or eastern Europe. Any future move will be made in response to the regions low labour costs and fast-growing car markets, factors that also prompted the company to double production in Poland. In addition Bridgestone is establishing a new proving ground, training and research centre near Rome, which is due to be completed in Spring 2006. Bridgestone currently runs five plants in Europe – three in Spain, one in France and one in Poland.
Mr Fujimara explained that moving to Eastern Europe also involves something of a pay-off. “Affordability is an issue for western tyre makers seeking to grow sales there – they are behind on technology but lower on prices,” said the Bridgestone executive.
Bridgestone says it believes it is “breakthrough time” for run-flat tyres. At least three major new volume-built car models will be launched this year with run-flat tyres specified as standard, said Des Collin, Bridgestone’s commercial vice-president. While the contracts for the first volume car application – the new Mini – have gone to Pirelli and Goodyear, Bridgestone has won contracts with BMW for its One Series small car. Bridgestone expects sales of its run-flats to rise by 50 per cent this year to 1.5 million Mr Collin added.
Michelin has announced that it has consolidated its activities in Poland and will now conduct is business under the unified name of Michelin Polska. The newly created entity also took over the activities of Stomil Olsztyn manufacturing, and Michelin Polska trade Polish media sources are reporting.
According to Poland AM news digest, the aim of the move is to unify Michelin’s structure and strengthen its image on domestic market. Michelin Polska is also responsible for operations in other countries, including Lithuania, Latvia and Estonia. The French manufacturer became Stomil’s majority shareholder in 1995 when it purchased 51.2 per cent of the tyre producer’s shares for $105 million. Last year, the firm posted a 153 million zloty (£26.53 million) net profit on revenues of 1.55 billion zloty (£268 million).
Hankook Tire Company, South Korea’s largest tyre manufacturer has reportedly broken the half-a-billion unit mark after 63 years of tyre production, the Asia Pulse news service is reporting. “Hankook Tire can produce 1.68 tyres in one second, 481 times more than it could when it was established in 1942,” the company said. “Once the ongoing expansions of production facilities both at home and abroad are completed, we will be able to break the one-billion-unit mark before 2010.” Hankook Tire has two manufacturing plants in South Korea and two plants in China. Hankook is the world’s ninth largest tyre manufacturer.
According to provisional output data released by the Office for National Statistics the total UK car production rose 4.5 per cent in November and has reached its highest November output since 2000. “This performance demonstrates the resilience of UK car production since the period of restructuring at the turn of the decade. Our nine volume manufacturers are now on track to produce 1.65 million cars in 2004 and similar volumes in 2005,” commented SMMT chief executive Christopher Macgowan these figures published just before Christmas. “Growth 2004 has largely focused on production for export, demonstrating the value and strength of UK manufacturing in a competitive global market. Seven out of every 10 cars made in the UK are destined for export and we expect this trend to continue in 2005,” he added. The output volume of commercial vehicles was up six per cent in November 2004 with an export growth up 25 per cent for the month, and 27.3 per cent over year-to-November respectively. “The recovery in CV demand throughout Europe has had a positive effect on UK production facilities. They have clearly been up to the challenge, delivering state-of-the-art vehicles throughout the EU. CVs produced for home markets remain broadly stable compared to 2003, reflecting the use of the UK as a positive outlet for new home produced vans and trucks. We still expect to meet the 2004 forecast for 210,000 units manufactured in the UK,” said Christopher Macgowan.
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