The fire-ravaged Bridgestone factory at Kuroiso City in northern Japan will resume “limited production” today, said corporation president Shigeo Watanabe at a press conference. He added that the shortfall in production would be made up by Bridgestone’s other Japanese factories.
The fire at Bridgestone’s factory in Kuroiso City, Japan, has been brought under control, with nearby residents returning home after staying overnight at public facilities. It is anticipated that the fire will disrupt supplies to car manufacturers, with 150,000 tyres out of a total stored of 250,000 having gone up in flames. Mitsubishi is reported as saying that it will seek stocks from other manufacturers from 16th September, when stocks of Bridgestone tyres are expected to run out, while Toyota says that it does not expect the fire to disrupt its operations and the company will “get tyres from other production sites”.
When you think of tyres, it tends to be the most common products such as car, truck, motorcycle, agricultural and so on. However, there are many other types of tyres which, while they may not involve volume production or long runs, are designed to fill the needs of specialised niches – ATVs, grass machinery and so on. Like most niche products, these can be very profitable; indeed, there are some companies that produce only these products. Specialising in specialisation, you might say.
A fire at Vredestein’s raw materials warehouse at Enschede on Friday 22nd August was quickly brought under control by local fire brigades and the company fire brigade and personnel. As a result both the Vredestein production shop and the warehouse were saved and deliveries will not be affected.
Hi-Tech Carbon of India is set to double output of carbon black at its factory at Gummipoondi. An investment of Rs 80 crore (US$17.5 million) will see annual production increase to 80,000 tonnes by next March. Half the current production of 40,000 tonnes goes to export.
Ford of Europe, which two months ago lowered its second-half-year production target by 80,000 vehicles, has announced that it will increase its fourth quarter production by 40,000 vehicles. This is in anticipation of an increase in demand later in the year and the introduction of new marketing programs to stimulate demand even further.
Kumho is the latest tyre manufacturer to introduce a new method of tyre manufacture. Known as APU (Advanced Processing Units), the modular system is being incorporated in the new Kumho factory that is being built at Pyongtaek, Korea, close to some major car assembly plants. The new factory will be dedicated to tyre production for the OE market and the first module will start production in November this year. Further modules will come on stream at the rate of one per month until full capacity is reached in February 2004. This full capacity will be in excess of two million tyres a year.
Ford of Europe, which two months ago lowered its second-half-year production target by 80,000 vehicles, has announced that it will increase its fourth quarter production by 40,000 vehicles. This is in anticipation of an increase in demand later in the year and the introduction of new marketing programs to stimulate demand even further.
The EU is planning legislation to significantly reduce (by 25 per cent) the amount of fluorinated greenhouse gases in a range of products by 2010. One of the worst greenhouse gases is sulphur hexafluoride, which is present in tyres, and which has a greenhouse effect 23,900 times that of carbon dioxide. Should the proposals become law, any EU country not meeting the standards could face sanctions and non-EU countries wanting to export goods that do not comply with the standards into Europe would be prevented from doing so.
Titan Tire will suspend production at its factory in Brownsville, Texas until market demand picks up. Production will continue at the plant in Des Moines, Iowa. A slump in the US agricultural and industrial tyre markets is blamed as the main cause, although US tyre manufacturers are under pressure from cheaper imported tyres. Titan currently has another factory standing idle – the former Fidelity Tire plant in Natchez.
Avon has been under the ownership of Cooper Tire for several years and under pressure to survive as a stand-alone unit within the company. In today’s climate, where tyre manufacturers are shifting production to low labour cost centres, the continued survival and profitability of Avon is a source of considerable pride in Melksham, home of Avon Tyres, and a puzzle to other manufacturers who struggle to make European plants, in particular UK-based plants, contribute to profits. The task of turning Avon into a net contributor to Cooper Tire was one that required some hard decisions being made. Cooper wanted to add value to the business and took on various issues at Avon. The choices taken meant that people suffered but there was also a lack of resources. The Cooper take-over was not simply a case of cutting costs by laying off staff. There was a tremendous investment in resources and equipment. A great deal of funding was spent on the business, and not just on plant. In all some 60 million pounds has been invested at Melksham. That was six years ago and Cooper Avon is a very different business now, from what it was even two years ago. Ron Shield, managing director at Avon, says, “The first two years were spent putting the business in order. We are now starting to get closer to where we need to be. Last year was our most successful year ever. We are starting to show Cooper that we are a positive contributor to the business.”
The 2 billion Yen investment in production expansion in Yokohama Philippines (T&A website May 2003) is to go ahead after “a perceived improvement in the business climate of the Philippines” according to Takashi Sugimoto, managing director for overseas business. This follows the resolution of a court case involving a dispute between Yokohama and a trade union, decided in favour of the management. The dispute involved the laying off of 70 employees.
Falling car sales in the USA have led VW to announce a cut in output at its plant in Mexico by 23 per cent. The move will entail laying off around 2,000 workers and contrasts with news earlier in the week that VW has approved an increase in production at its Chinese operations. Last year, China took over from Germany as VW’s largest single market.
Toyota is in talks about forming an alliance with Guangzhou Automobile to manufacture vehicles in China. The Japanese company says that it is also in talks with other, unnamed, local manufacturers. Toyota has been slow to take advantage of the growing Chinese market and the latest moves are seen as an attempt to catch up with its rivals.
Pakistan’s largest tyre manufacturer, General Tyre & Rubber Co. of Pakistan, is to expand annual production by 30 per cent, from one million tyres to 1.3 million, with an investment of 500 million Rupees ($8.65 million). 50 per cent of General’s sales are OE (cars and trucks), 45 per cent replacement and five per cent to the Government. The company also exports tyres with a value of US$700,000, which is expected to rise to US$ 1 million this year. 31 per cent of Pakistan’s tyre demand is met by domestic producers, 53 per cent by imports and the remaining 16 per cent by smuggled truck tyres.
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