Raw Materials
Prices for all Bridgestone consumer, commercial and specialty tyres are set to increase by an average of seven per cent in European markets. The new prices take effect with the start of the second financial quarter in April and exact increases will vary between product categories, Bridgestone Europe reports.
A preliminary report from analysts suggests that Pirelli’s fourth quarter financial figures have beaten consensus estimates in terms of earnings before interest and tax by 15 per cent, leading banks to predict an upgrade to the company’s stock value. Net debt is also lower than expected according to the report, while analysts called the Italian manufacturers message that its pricing will offset higher raw materials costs “very confident”.
Indonesia’s PT Chandra Asri Petrochemical has outlined plans to diversify its production portfolio and enter the synthetic rubber sector through the construction of a new butadiene production facility – Indonesia’s first – in Banten Province. According to Mr. Suryandi, the company’s corporate secretary and investor relations director, the US$100 million facility will have a production capacity of up to 100,000 tons per annum and is expected to commence operations in the third quarter of 2013. Construction of the plant is anticipated to begin in the second quarter of this year.
Tyres & Accessories magazine, produced by the team behind tyrepress.com will be covering the subjects of wheels, raw materials and diagnostic equipment in its April edition. For all enquiries relating to this magazine, email the relevant editor listed below, or theeditor@77.237.250.82. For advertising enquiries, email scott.parker@77.237.250.82. This preview, along with deadline information, can be found at the foot of the e-Newsletter, sent to over 16,000 subscribers on every business day. To subscribe to the e-Newsletter, click the "Get a Grip on Tyres" banner in the right hand column of the tyrepress.com homepage.
Isobutene is a key raw material needed in the manufacture of butyl rubber, and traditionally this substance has been produced from fossil fuel sources. Yet Lanxess, the world’s largest purchaser of isobutene, believes that – in the words of its Board of Management chairman Axel Heitmann – it is “only prudent” to seek alternative supply options from renewable sources. For this reason the German specialty chemicals manufacturer recently increased its minority shareholding in US based renewable chemicals company Gevo Inc. Following a US$10 million private placement investment made in May 2010, Lanxess has now invested $17 million in Gevo’s initial public offering, giving it a 9.1 per cent shareholding.
In August 2009 Dutch wholesaler Van den Ban Autobanden opened its new ‘Logistic Tyre Centre’ in the town of Hellevoetsluis. Those seeking a detailed description of the hi-tech warehouse facility can find it in the March 2010 edition of Tyres & Accessories, yet it is definitely worth mentioning that the material handling system used is without parallel in the tyre industry and enables the fully automated and mechanised internal transport, sorting and order picking of all tyres housed within the 24,000 square metre building; last year it smoothly dispatched more than 5,0 million tyres to customers throughout the region. Back when the centre opened, construction work on Van den Ban’s new administrative headquarters was underway on an adjacent greenfield site; last October this new head office building officially opened, marking the conclusion of Van den Ban’s two-stage expansion project. The wholesaler says it is now fully equipped to take on the ever evolving market and any challenges it may bring.
Following a 2010 in which set targets were “clearly surpassed”, Continental AG says it aims to achieve double-digit growth this year. At the company’s Annual Financial Press Conference, held on March 3 in the German city of Frankfurt, CEO Dr. Elmar Degenhart reported a sales growth of almost 30 per cent, to 26 billion euros. This represents record sales for the automotive supplier, a personal best also matched by a record operating result.
Pirelli has announced that it has signed a research agreement with Danish tyre recovery company Genan to find ways of reusing industrial raw materials in tyre production. Managing director of Pirelli Tyre, Francesco Gori said: “Being able to reduce the dependence of the production cycle on natural rubber by 10 per cent could produce considerable savings”. Gori also said the use of materials recovered from tyres could become a necessity based on “sustainability”.
On March 3 Continental AG will hold its annual press conference, at which it will provide detailed information on its performance in 2010, a year in which the automotive supplier says it emerged from the crisis “in impressively good shape.” The company has already reported an increase in annual sales from 20 billion euros in 2009 to “at least” 25.5 billion euros last year, a figure helped by the “positive performance” of the company’s car tyre division.
Netherlands tyre wholesaler S&H Tyres was founded in 2002 by Simon Klapwijk and Henk van Dijk, who opened the tyre wholesale company in “a little village under the smoke of Rotterdam,” in S and H’s own words. Rotterdam’s status as one of the biggest container ports in the world is not insignificant; S&H has a logistics centre 20 minutes away from the port. It is this kind of proximity that gives S&H an advantage in moving with international tyre-buying trends, the company believes.
The China Economic News Service reports that the Taiwan’s based Formosa Plastics Group (FPG) intends to invest US$300 million establishing a synthetic rubber production facility in China’s Zheijiang Province. Construction of the plant Ningbo plant is expected to begin in October 2011 with volume production commencing in two years’ time. Initial output is given at 50,000 tons of IIR (isobutylene-isoprene rubber) per annum, with the tyre industry tipped to be the largest consumer of this. CENS reports that growing domestic demand from Chinese tyre makers has triggered FPG’s entry into the rubber industry. Furthermore, the company is said to be contemplating three other China based projects related to tyre production; these would require a further investment of $200 million.
Reporting financial results for the quarter ending 31 December, 2010, Cooper Tire & Rubber Co saw its operating profit diminish to $55 million, $5 million down on the same quarter in 2009, though it also achieved record net sales of $920 million, $147 million, or 19 per cent, up on 2009. Roy Armes, CEO, commented that while demand for the company’s products was strong and manufacturing facilities were run “efficiently”, raw materials prices and the available inventory had limited progress in terms of operating profit. Operating profit was $55 million, or 5.9 percent of net sales.
Continental says it has “latched onto” results of a university study into the latex properties inherent in dandelions. A research team at the University of Münster subjected the Asteraceae family flower to a number of lab tests and observed they produce a gum elastic equal in quality to rubber tree latex. Since learning of this discovery Continental reports working hard to promote the idea, and today is a member of a consortium of research institutes and research partners who intend to transform the research results into market products.
With relative shortages in supply and increased demand from the rapidly expanding emerging markets of the East pushing natural rubber and other raw material costs higher and higher, most tyre manufacturers are again raising their prices in response. But what do the latest raw material hikes mean for the world’s tyre manufacturers? And how much longer will this price boom continue?
Indonesia is the world’s second largest natural rubber producer, with figures from the Association of Natural Rubber Producing Countries putting the number of hectares under cultivation at 3,445,000 and those under tapping at 2,773,000. With an aim of further enhancing this production, Bridgestone Corporation has entered into a cooperative research project agreement with two other parties. News of the project between Bridgestone and the National Institute of Advanced Industrial Science and Technology (AIST) and the Indonesian Agency for the Assessment and Application of Technology (Badan Pengkajian dan Penerapan Teknologi, or BPPT) was announced on February 24 at a press conference held at the BPPT office in Jakarta.
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