The first phase capacity expansion of JK Tyre & Industries’ Banmore plant in Madhya Pradesh, India is now complete. An investment of Rs 3.12 billion (£30.1 million) has lifted capacity for passenger car radials by 31 per cent, to 5.1 million tyres per annum. An additional investment of Rs 6.17 billion (£59.5 million) will increase capacity by an additional 31 per cent by April 2024.
Nokian Tyres has initiated work on its Oradea, Romania passenger car tyre factory, billed as the tyre industry’s first zero CO2 emission plant. An event marking the groundbreaking was attended by the Prime Minister of Romania, Nicolae Ciucă. The President of the Bihor County Council, Ilie Bolojan, and other high-level Romanian and Finnish officials also participated along with the chair of Nokian Tyres’s board of directors Jukka Hienonen. The first tyres are estimated to be produced in the second half of 2024. Commercial tyre production is expected to start in early 2025.
Nokian Tyres has presented its first quarterly results since the company sold its Russian operations to Tatneft its resultant production gap. In short, first quarter 2023 net sales were 236.4 million euros down 26.8 per cent compare with 322.9 million euros during the same period last year. That meant an operating loss of 18.8 million euros compared with 21.5 million euros of operating profit in the first quarter of 2022.
Nokian Tyres’s well-publicised exit from Russia has left it with a similarly well-reported production gap that continues to impact the company’s ongoing business. Speaking as part of the company’s first quarter 2023 results presentation, Nokian Tyres executives emphasised that “new capacity is our #1 priority” and shared further details of how they are planning to fill the firm’s production gap. We already knew that Nokian plans to expand its existing factories in Nokia, Finland and Dayton, USA as well as build a new factory in Romania and make off-take contracts with third-party manufacturers, what’s new is the detail and time frames associated with “building the new Nokian Tyres”.
In March Goodyear Slovenia concluded a 90-million-euro project to increase tyre production capacity at its Kranj plant by 25 per cent, a project that has created 160 jobs. The project commenced in January 2019 with a planned completion date of late 2021, however measures related to Covid-19 delayed work on the project.
Nokian Tyres has begun construction work on a finished goods warehouse at the Dayton, Tennessee production site where it is currently doubling production capacity for all-season and all-weather tyres and adding light truck tyres to the product mix. The warehouse will hold as many as 600,000 tyres and should be ready for use by mid-2024.
World Bank Group member IFC is investing US$30 million in JK Tyre & Industries. These funds will part-finance the expansion of capacities and integration of resource-efficient technologies into TBR & PCR manufacturing, leading to a more than 10% increase in radial tyre production. IFC gains a 5.6% stake in the tyre maker.
On 2 March 2023 the Department of Industry and Information Technology of Shandong Province stated that it agreed to Zhucheng Yong’an Rubber Technology (Yong’an Rubber) to undergo a “capacity replacement” at its tyre production facility. The company in Zhucheng, Weifang, plans to dismantle the production capacity of 300,000 all-steel radial tyres and 5.46 million semi-steel radial tyres and launch a project with an annual output of 70,100 tons of OTR tyres. The Chinese government calls this behaviour “capacity replacement”, meaning that a company must withdraw its equivalent production capacity if it wants to build a new project. Tyrepress’ sister website, Tyrepress China notes that Yong’an Rubber had undergone bankruptcy and reorganisation in 2020-21, having been acquired by Sailun.
Sentury’s revenue and net profit in 2022 increased year-on-year. The tyre manufacturer’s annual report shows that last year’s revenue was 6.29 billion yuan (about £760 million; €860 million), an increase of 21.53 per cent. Net profit attributable to shareholders of listed companies was 800 million yuan (approximately £97 million; €1.1 billion), an increase of 6.3 per cent.
In order to satisfy increasing local demand, Yokohama Rubber is expanding passenger car tyre production capacity in India. It will invest US$82 million in its Yokohama India manufacturing and sales subsidiary to increase capacity from 2.8 million tyres per annum to 4.5 million tyres.
The official Chinese website of Nokian Tyres states that the Finnish tyre manufacturer is withdrawing from business in the Chinese market due to its “limited production capacity”.
On 18 January, Sailun Group announced an 833-million-yuan (£99.63 million) investment to upgrade OTR tyre production at its plant in Qingdao, China. The upgrade will allow Sailun to produce OTR tyres in sizes up to and including 49-inch. The tyre maker intends to complete this upgrade and adjust its production portfolio within a period of ten months.
Recently, Guizhou Tyre (also known as Advance Tyre) disclosed utilising production capacity. In 2022, China has implemented relatively strict control measures against the epidemic, and the logistics are not smooth, which indirectly leads to weak demand for truck and bus tyres. Affected by the above factors, Guizhou Tyre’s domestic plant has a capacity utilisation rate of around 80 per cent for all-steel radial tyres. Over the same period, capacity utilisation for OTR tyres was about 95 per cent.
Passenger car and light truck (PCLT) tyre production trends in Western Europe have been scaling down over the long-term. The move to larger production facilities in the comparatively low-cost labour markets in Eastern Europe, or greater reliance on imports from Asia, has seen a steady stream of plant closures and conversions to speciality, short-run production capacity – on in the case of Cooper Tire’s UK plant, for example, one followed by the other – in the region. A new assessment of the most recent three-year period by tyre industry analyst Astutus Research suggests that the overall picture has been of a decline similar to the period following the 2008 financial crisis, which was itself a catalyst for this trend. Yet digging a little deeper into the figures shows several dynamics at play in European PCLT tyre production, including supply chain disruption and spiralling energy costs. For comprehensive analysis of global tyre market trends, a series of reports by Astutus Research are available to buy now in the Tyrepress Reports Shop – click here for more details.
According to local media sources, both Bridgestone and Maxxis plan to ramp up their activities in India. Maxxis Group intends to invest a further US$100 million over the next five years to capture a 15 per cent stake in the two-wheeler tyre market, while Bridgestone Corporation is looking to increase its production capacity for car tyres by ten per cent next year to meet rising demand from both OEM and aftermarket customers.
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Valokuvaaja/Nokian Tyres
Sailun
Sentury
Guizhou Tyre