Raw Materials
Consolidated sales and operating profit may have been down year-on-year during the three months to 30 September 2021, but Hankook Tire was nonetheless pleased to experience “qualitative growth” during the quarter.
At the start of 2021 we published a headline suggesting that “shipping costs [were] temporary” and “price increases less so”. While that article was based on the latest third-party data as well as the expert opinion of a leading wholesaler, it now looks like shipping cost woes are set to continue well into 2022 and that – while they have softened recently – raw material costs will remain headwinds during the next year or so as well.
For the three months to 30 September 2021, the second quarter of its 2021-22 financial year, Apollo Tyres reports consolidated revenue of Rs 50.77 billion (£493.84 million). This represents an 18 per cent increase over the same period of the previous fiscal year. EBITDA decreased 9.8 per cent year-on-year, to Rs 6.38 billion (£62.06 million) with a margin of 12.6 per cent (16.5 per cent in Q2 2020-21). Net profit amounted to Rs 1.74 billion (£16.93 million).
Life for Tyres (L4T) Group has signed a ten-year offtake agreement with Spanish base oils supplier Nexolub to market oils extracted from end-of-life tyres processed at the plant it is currently setting up in Puertollano, Spain. The L4T facility is scheduled to be completed in December and become operational the following month with an annual capacity of 27,000 tonnes – a quantity equivalent to eight per cent of the end-of-life tyres generated in the country each year – it will be one of the largest facilities of its type in Europe.
Year-on-year comparisons of financial performance tell us arguably more about global events than an individual company’s economic trajectory at the moment. Thus, it came as no surprise a few months back when Michelin reported much healthier first-half results compared with pandemic-riddled 2020. Similarly, eyebrows aren’t raised now when the company notes the impact of rising materials, shipping and energy costs as well as a shortage of semiconductors and labour shortages upon its performance in Q3 2021.
As if the Covid-related troubles combined with complex shipping challenges and rising raw material costs weren’t enough, Chinese government policy is now adding to the pressure on tyre manufacturers making tyres for export from the People’s Republic. Specifically, the Chinese central government environmental policy has led to power rationing across the country since mid-September, which has had a marked impact on manufacturing business including the tyre industry. Indeed, more than 20 tyre manufacturers have experienced power-rationing-related temporary shutdowns and/or have implemented price increases because of these product headwinds. And these are having a marked impact on tyre production.
Last Friday was an important day for GRI in regards to its environmental engagements – the Sri Lankan tyre maker launched its ‘Greening Our Planet’ project by planting 450 rubber trees at smallholder rubber farms in Moneragala District.
Trelleborg Group brand Mitas has announced price increases for its motorcycle, scooter, go kart, trailer and aircraft tyres, as well as for its complete range of tubes and mousses. This increase, the second for 2021, takes effect from 1 October 2021 and is being implemented due to “significantly higher prices of raw materials and logistic services across the industry.”
Nynas has appointed Johan Andersson as vice president Group Strategy & Sustainable Development in Nynas. Johan Andersson leaves the position as CEO of the National Oil Industry Association in Sweden, Drivkraft Sverige, to take on the role. As the CEO he has since 2019 launched a roadmap for climate-neutral competitiveness for the industry, restructured the industry association and repositioned it as an organisation for innovative and sustainable mobility.
Black Bear Carbon B.V. has entered into a long-term supply chain and marketing cooperation with German chemicals marketing company Helm AG. Under this cooperation, the partners will jointly introduce industrial clients to the carbon black that Black Bear recovers from end-of-life tyres. Black Bear says it will contribute its extensive knowledge in product and application development while Helm will provide its supply chain know-how and commercial expertise through its broad market presence.
Research into the use of locally sourced rubber in tyre manufacture has led to Continental’s Dr Carla Recker being nominated for a prestigious award in her native Germany. Together with fellow researchers Prof. Dr Dirk Prüfer from the University of Münster and Dr Christian Schulze Gronover from the Fraunhofer Institute for Molecular Biology and Applied Ecology IME, Recker has been shortlisted for the ‘Deutscher Zukunftspreis 2021’, an award for technology and innovation bestowed by Germany’s President.
Chemical and material manufacturer DuPont Mobility & Materials, which supplies tyremakers around the world, has announced sweeping prices increases globally. The price increases take effect from 1 October 2021 “or as soon as contracts allow”.
The latest figures from the Association of Natural Rubber Producing Countries (ANRPC) suggest that year-on-year growth in global natural rubber supply won’t be quite as high as previously anticipated and will be lower than expected demand. The ANRPC has downwardly revised its full-year outlook on global natural rubber supply for 2021 to 13.782 million tonnes.
Locally harvested natural rubber is the key raw material that Sri Lankan tyre maker GRI Tires utilises. It thus views natural rubber farmers as important stakeholders in the ‘GRI ecosystem’. This is an ecosystem that “focuses on sustainability and aims to inspire the farming communities by recognising their work as well as providing knowledge and skills for their development and optimising the yields from their natural rubber farms.”
Toyo Tire Corporation has re-examined and updated its natural rubber procurement policy and established this as an independent policy separate from the company’s CSR Procurement Guidelines that prescribe the proper procurement process for the Toyo Tire Group (the Group).
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