Middle East
Kumho Tire Co., Inc. donated 3,290 units of tires equivalent to USD100,000 to Islamic Republic of Iran in humanitarian support in the aftermath of the catastrophic damage in terms of both human life and property following an earthquake.
Alliance Tire has some unusual barriers to overcome in its search for continued success. However the Israeli tyre manufacturer is focussed and determined to grow.
Most tyre manufacturers have the ability, in today’s global market, to sell anywhere in the world, certainly to their neighbours. Alliance is denied that opportunity by being an Israeli company. Yet despite being perhaps a key industry in Israel, Alliance still has to operate on a free market basis. Denied access to the obvious Middle East market, for reasons we may not always comprehend but certainly cannot have failed to have noticed over the past 50 plus years, Alliance has to work doubly hard to gain market share. That takes determination. It takes loyalty. There is no possibility of failure, therefore everyone must work to win. To understand that drive is to understand why Alliance Tire, a small, single plant manufacturer in a beleaguered state, has the potential not only to survive but to take a leading role in its chosen market sectors.
Alliance has long taken the view that developing niche products for specialist markets is the way to proceed. It has therefore developed its own technology and products to gain respect and a leading market share in its chosen agricultural sector. The requirement to develop and refine placed a burden on the company loans. However, with the appointment of Joseph Anglister as General Manager there was a turnaround in fortunes at Alliance and once more the company was back in operating profit. The turnaround came as the result of efficiencies created by the investment allied to a reduction in the workforce. Today the Alliance workforce has vastly improved its efficiency in production. However, the investment continues and next year will see the installation of a new state of the art calendaring line for inner liners.
Bridgestone Corporation has announced that it has begun raising tyre prices by around 5 per cent in Asia, Oceania, the Middle East, Africa and Russia to offset the rising cost of natural rubber and other raw materials. The price increases vary by product and by market and largely apply to radial and bias tyres for passenger cars, light trucks, trucks and buses sold under the Bridgestone and Firestone brands.
Jarro F. Kaplan, a Goodyear employee since 1986, is already in his second year as President Eastern Europe and is responsible for the region that includes Eastern Europe, South Africa, and the Middle East as well as some other countries in Asia. Before that he was General Manager Deutsche Goodyear in Cologne for two years and earlier in his career he held General Manager positions in the UK and Turkey. The region he is now responsible for is – measured by turnover – relatively small, but is becoming increasingly important due to the fact that the group is running highly competitive factories in Poland, Slovenia and Turkey. The income of the workers in those countries is not comparable with that of countries in Western Europe and will not become so for the next decade.
The biggest factory within the production network of the Goodyear Group in the whole of Europe is the Polish factory in Debica. The production is focused on passenger car tyres, mostly S/T rated. The Debica brand dominates, but many Fulda tyres are also produced there. And the Goodyear brand? “Not yet” says Kaplan. Debica has a production capacity of 40,000 tyres a day and there are already concrete plans drawn up to expand this. Plus it should not be forgotten that the Debica factory also produces some agricultural tyres as well as commercial tyres.
South Africa also belongs to Kaplan’s “Empire”. Goodyear has a big factory there and also its own equity with about 150 outlets, plus it is building and expanding a franchise-system.
Starting from South Africa, Goodyear is interested in doing more business in countries like Botswana, Sierra Leone, Kenya and some other countries. The company’s own equity in South Africa is doing a good job delivering tyres in the shortest possible time to customers. But it is absolutely clear that in the long run Goodyear must have its own people in those countries on which the company can rely; it can no longer leave everything in the hands of distributors. Kaplan: “You need to have your own people on the ground.”
Kaplan is travelling much more. For example to Dubai; from here Goodyear is defending its interests in countries like Israel as well as Palestine, in Iraq, Iran and so on. He travels to the north of Africa as well as to Pakistan. Pakistan belongs to his region. He who knows world politics can imagine that it might be impossible to bring India and Pakistan together under the one umbrella of Goodyear Asia.
To summarise: The Eastern Region is active in 95 different countries, with 52 different languages, which forces all managers to be sensitive and to respect the varied cultures.
Bridgestone Corporation has announced that it will increase production capacity of truck and bus radials at three plants in Japan, and will double the planned capacity at a plant currently under construction in Thailand. The reason is to cater for continuing growth in global demand for truck and bus tyres.
Production at the three Japanese plants at Amagi, Tochigi and Tokyo will increase to 1,300 tyres per day, thanks to an investment of two billion Yen (US$16.86 million), with expansion work expected to be complete by the end of 2004.
In Thailand, subsidiary company Bridgestone Tire Manufacturing (Thailand) Co. Ltd., has doubled the capacity originally planned for the plant it is building in Chonburi. Construction work began in February this year and the plant will begin production in the second half of 2004, with a daily production of 2,500 tyres. The latest expansion plans will see this increase to 5,000 tyres a day by the end of 2006, and they will cost seven billion Yen ($59 m), bringing the total investment in Chonburi to 24 billion Yen ($202.3 m).
These projects are part of Bridgestone’s on-going, global plans for expanding production capacity in radials for trucks, buses and passenger cars. Car tyre investment will address the shift in demand towards larger sizes and high-performance tyres in the mature markets of North America, Europe and Japan. At the same time, it will cater for growing demand for standard tyres in Asia, the Middle East and Africa.
The Bridgestone group has earmarked around 90 billion Yen for its capital spending programmes by the end of 2006.
Goodyear’s second quarter (Q2) figures reveal that the company lost $73.6 million, compared to a net income in Q2 last year of $28.9 m. Sales were up nearly 8 per cent at $3.8 billion (3.5 bn), but volumes were down half a million units to 52.8 million pieces. Chairman and CEO Robert J. Keegan described the results as „disappointing“, but said he was encouraged by the „numerous positive trends„ (notably operations outside North America) and he was „optimistic“ about the turnaround plans.
Sumitomo Rubber Industries has announced its intention to increase prices from three to five per cent in the second half of the year. These increases will apply to Sumitomo brand passenger, light truck, truck and bus tyres in Asia, Middle East, Latin America and Africa and they will vary according to country and product line. The increase is necessary, says SRI, because of increasing raw material costs and follows a similar price increase introduced in January this year.
Bridgestone Corp. has begun raising tyre prices by between 3 and 5 per cent in Asia, Oceania, the Middle East and Africa to cover rising costs of raw materials. The increases will cover Bridgestone and Firestone radial and bias passenger, light truck, truck and bus tyres. Prices in the Japanese market will not be affected. Bridgestone has been implementing the price increases in stages since March 1 to compensate for the rising costs of raw materials, including natural rubber, synthetic rubber, carbon black and some chemical additives.
Goodyear Tire & Rubber has posted a first quarter 2003 net loss of $163.3 million, compared to a 1Q loss last year of $63.2 million. Turnover for the period was up 7.1 per cent to $3.5 billion ($3.3 bn 1Q 2002), due largely to currency translation and the loss before taxes was $135 million ($85.6 m). International tyre sales were generally good, but the tyre business in North America continued to struggle. President and CEO Robert Keegan was optimistic, however, saying that Goodyear was “aggressively cutting costs to make the business competitive.” He added: “We have much work left to do, but our turnaround is on track”.
Yokohama Tire Philippines Inc. (YTP), a car tyre manufacturing and marketing subsidiary of Yokohama Rubber, is to upgrade its facilities to boost production by 25 per cent by the end of the year. The upgrade, which will cost around two billion Yen (15.1 million Euros), will boost annual capacity from two million tyres to 2.5 million. Most of the increase will be in 16 inch and larger sizes and, by the year end, it is anticipated that these sizes will account for 30 per cent of production. YTP began produc tion in 1998 and has been profitable since year one. 90 per cent of production is exported to Europe, the Middle East and ASEAN countries.
Japanese tyre giant Bridgestone Corporation has reported a strong rise in net profit for the year ended December 31, 2002, and predicts a gain for 2003 as well, even though it warns that business conditions are getting tougher. Bridgestone’s group net profit more than doubled to US$378 million, from US$145 million, on brisk overseas sales. Group sales climbed 5.3 per cent to US$18,700 million, with pre-tax profit jumping 99 per cent to US$1,233 million. For the year to December 2003, the company said it expects group net profit to come to US$584 million, the same mark it initially set for 2002. It forecasts pre-tax profit to shrink to US$1,042 million and sales to slip to US$18,682 million. Bridgestone is boosting its capital spending in 2003 by more than 60 per cent to US$1.6 billion. The company’s president, Shigeo Watanabe, said the investment is aimed at boosting output capacity in Thailand and Poland, as well as upgrading each plant in Japan.
After lengthy negotiations The Harvey Brodsky Group has decided to withdraw its offer to purchase 51% of the stock of Alliance Tire, Israel.
In an interview with a Slovenian newspaper Jarro Kaplan, president of Goodyear’s Eastern Europe, Africa and Middle East region, paid tribute to the part played by Sava Tire in Goodyear’s global business activities. Since Goodyear took an 80 per cent stake in Sava in 1998, the Slovenian company has grown in international importance, exporting more than 90 per cent of its production to 70 countries, with plans to enter the US market soon. Kaplan described the Sava workforce as “well educated, highly productive and internationally oriented.” A five-year investment program in Sava was completed a year ahead of schedule and, says Kaplan, Goodyear is seriously considering further production expansion. In addition to the Sava brand, the factory produces Goodyear, Dunlop, Fulda and Debica brand tyres and is Goodyear’s only European factory to produce 17.5 inch truck tyres.
Bridgestone Corp, Japan’s largest tyremaker, said on Tuesday it would spend 17 billion yen to build a third tyre plant in Thailand to meet growing demand for truck and bus tyres, particularly in Asia. The development, first notified in December 2000 by T&A, could also take Bridgestone to the number one position in the global tyre market. Bridgestone said in a statement that the new plant, located in Chonburi, 60 km south of Bangkok, would produce and export tyres to the Americas, Europe, the Middle East, Africa, and other Southeast Asian countries. “The new plant is a move to provide a multilateral, global response to the growing worldwide demand for truck and bus tyres,” said a spokesman for Bridgestone.
On December 1st, Andreas Niegsch will be appointed General Manager of Goodyear Dunlop UK, replacing Marco Molinari, who is leaving the company to pursue other interests. Molinari’s current position of Group Managing Director will be eliminated. Niegsch will report to Robin McKnight, MD of Goodyear Dunlop sales countries, western Europe. Niegsch originally joined Dunlop Germany in 1998 as manager, sales countries, western Europe and was appointed director the following year. In 2001 he assumed his current position as director of marketing and sales for Goodyear’s Eastern Europe, Middle East and Africa region. The UK manufacturing operations at Wolverhampton and Washington will report directly to the European regional manufacturing HQ in Luxembourg, as part of the current policy to centralise product sourcing to obtain maximum efficiencies.
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