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Michelin Upgraded to ‘Buy’ Following Better than Expected Results

Analysts at Deutsche Bank have upgraded their rating for Michelin shares to “Buy” following first half 2010 financial results that were better than expected. The results published on 30 July show that revenues were up 17 per cent, mostly driven by volume growth of 15 per cent. According to the analysts, this was “by far the main earnings driver” since raw material price increases had no negative impact on first half results due to a lag effect. Overall first half 2010 operating income (822 million euros) virtually caught up with the firm’s full-year 2001 operating profit of (862 million euros).

Looking forward, the company’s management is now aiming for a full year operating margin of close to 9 per cent (1.5 billion euros), underscoring that in the second half the group should be able to more than offset a raw materials price headwind of 650 million euros.

3rd August 2010/by Tyrepress Editors

Sibur Enters the Automotive Components Business

The Sibur Group has sold tyres through its Sibur-Russian Tyres subsidiary for the past eight years, but now it has also turned its attention to other vehicle components. In late June the group’s “Plastic JSC” operation signed a letter of intent with the Sollers group, a Russian manufacturer that produces Fiat, Isuzu and SsanYong vehicles under licence. The focus of the letter is to indentify the main direction future cooperation between these two parties could take in respect to the production and supply of automotive components.

20th July 2010/by Tyrepress Editors

Analysts: Increased Volume and Raw Material Costs, But ‘Robust’ 2Q for Tyre Majors

Market analysts at Morgan Stanley have predicted a “robust second quarter results season characterised by rebounding volumes and cost savings.” The volume of sales, which are reported to have improved from the low base of 2009, is said to be tyremakers’ biggest tailwind, but the increased cost of raw materials are also expected to kick-in in the manufacturers’ second quarter reports.

Raw materials are estimated to add a headwind of 300 – 440 basis points to the tyremakers’ margins, a trend that Morgan Stanley expects to accelerate through the rest of the year. Crucially, Morgan Stanley’s view is that while some of the numerous prices increases implemented up till now “are likely to feed through to the bottom line already,” they are note expected to cover more than a third of the input cost burden this quarter.

15th July 2010/by Tyrepress Editors

Natural Rubber Production Growth Slower than Expected

Data and estimates from the Association of Natural Rubber Producing Countries (ANRPC) indicate global supply of natural rubber will grow this year at a slower rate that previously anticipated. Forecasts based on preliminary estimates and reports available up to mid-June point to a 5.2 per cent growth, lower than the 6.3 per cent rate anticipated in March and 6.1 per cent rate anticipated in May.

14th July 2010/by Tyrepress Editors

Cuban Retreader Poligom Output 56,900 tyres in 2009

International News

A recent article written by Joel Mayor Loran and published by the Granma and Periodico publications in Cuba gives a fascinating insight into the workings of the country’s National Rubber Company – Poligom. According to the article, which is entitled “How to Save a Million Dollars” the Cuban retreading operation has been facing a scarcity of raw materials and retreadable casings.

The Poligom National Rubber Company reportedly runs five factories specialised retreading work, which retreaded 56,900 tyres in 2009. However, the lack of stability in the supply is said to have affected plans to increase production to 90,000 in 2010. In the year to 10 June the retread companies located in the municipality of Cotorro in Havana City, in the central province of Las Villas, and in the eastern provinces of Camaguey, Holguin and Santiago de Cuba received 34,000 casings, 6,000 less than expected.

12th July 2010/by Tyrepress Editors

Russian Tyre Prices to Rise 5 – 10%

The global tendency towards increased tyre prices could also be affecting product costs on the Russian tyre market. According to a poll conducted by Russian website topof.ru, manufacturers “unanimously speak about escalating costs of raw materials, produced both in Russia and abroad.” For companies that import their products from abroad increased transportation costs are said to be a problem. Besides the standard currency fluctuations, tariff rates are reportedly another important factor. The result: “an average delivery costs increase [of] 15 per cent.”

8th July 2010/by Tyrepress Editors

Bridgestone Partners to Improve Indonesia Rubber Production

Bridgestone Corp. is partnering with the World Agroforestry Centre in a program to help small rubber tree growers Indonesia. The partnership will provide growers with information and guidance on best practices in the cultivation of rubber trees. The parties will also conduct joint research intended to help stabilize the region's agricultural rubber industry into the future.

8th July 2010/by Tyrepress Editors

NTDA: Tyre Shortages Mean Price Rises

The National Tyre Distributors Association (NTDA) and its wholesale arm, the Tyre Wholesalers Group (TWG) have warned that "substantial" price rises are imminent. The core raw material price increase reasons for the shortage are nothing new, but the fact that a number of tyre manufacturers closed factories in recent years means there is now insufficient capacity to make up the shortfalls. In addition the fact that last winter was particularly severe across much of northern Europe led to unprecedented demand for winter tyres. With this year's winter selling season due to begin shortly, manufacturers are replenishing stocks of winter tyres in preparation.

8th July 2010/by Tyrepress Editors

MAI International ‘Guarantees’ Performance

At the recent Reifen tyre show in Essen, Italian company MAI International showed examples of its Maxam range of all-steel radial OTR tyres, designed to cope with the requirements of vehicles working in today's construction, mining and civil engineering industries. And all this comes with the backing of a five-year warranty against manufacturing defects.

The range of tyres consists of a variety of sizes and tread patterns to suit different applications. For example, the MSV01 is designed primarily for on- and off-road use and its construction means minimal road noise and reduced vibration for enhanced operator comfort. The MS201 features an off-road directional tread design and it is said to offer low noise and reduced vibration too. For more demanding and winter/snow applications, the Maxam MS202 SnowXtra tyre is available in 24 and 25-inch rim sizes, suitable for loaders and articulated dumpers. The self-cleaning tread provides excellent winter traction and the cut-resistant compound prolongs service life.

6th July 2010/by Tyrepress Editors

Evonik to Close Botlek Carbon Black Plant on 31 July

Evonik has announced that it will close its Botlek, Netherlands carbon black plant on 31 July 2010 as part of a production “realignment” programme. Plans are said to be in place for the site to continue as a supplier of energy to businesses located in the vicinity for the news few years. "While the Botlek facility has always excelled in quality and efficiency, the market has moved away from Northwest Europe. Botlek’s great performance is, unfortunately, not enough to overcome the logistical disadvantage", said Jack Clem, Evonik’s head of Carbon Black.

According to the company, the guiding principle behind the realignment of Evonik's European carbon black production capacities is “closer to the customer.” Their view is that, with the carbon black market in Western Europe is increasingly shifting towards Central Europe and that the main drivers of this change are the major tyre manufacturers and producers of mechanical rubber goods.

2nd July 2010/by Tyrepress Editors

Bridgestone Bandag Raises US Prices

Prices of certain brand products sold by Bridgestone Bandag Tire Solutions in the US have gone up by as much as six per cent. The increases, effective as of July 1, apply to Bridgestone brand truck and bus radial tyres sold by the operation.

2nd July 2010/by Tyrepress Editors

Stamford Tyres “Laid Foundations for Future Growth” in FY2010

Singaporean tyre and wheel distributor Stamford Tyres has announced a net profit of S$9.4 million (£4.5 million) for the end of financial year 2010, which ended on 30 April, over eight times the net profit of S$1.0 million in FY2009. The company’s president and CEO, Wee Kok Wah said: “Over the past year, we have worked hard to lay the foundations for the Group’s future growth… In accordance with the much improved set of results the Board of Directors has recommended a final dividend of 1.0 Singapore cents to reward our loyal shareholders.” The company reduced its operating expenses by 16.3 per cent, from S$64.5 million in FY2009 to S$54.0 million in FY2010, while Stamford experienced the slightest of declines in gross profit – down 1.5 per cent to S$66.5 million – and its gross profit margin, which was at 21.4 per cent as opposed to 22.7 per cent the previous year. Higher tyre purchase prices worldwide and lower sales from the Group’s Thai wheel plant were the main causes.

29th June 2010/by Tyrepress Editors

Natural Rubber Prices Continue Climbing

Bloomberg reports that natural rubber prices continued rising for the third straight day on fears that heavy rains will hurt output in Thailand. Tokyo rubber futures jumped 1.5 per cent on Thursday after a 3.8 per cent rise earlier in the week. A monsoon is dumping heavy rains on many parts of Thailand, the world’s largest natural rubber producer, and are not expected to dissipate soon.

25th June 2010/by Tyrepress Editors

Lanxess Increases NBR Price

The Technical Rubber Products (TRP) business unit of specialty chemicals group Lanxess AG has increased its prices effective for NBR (nitrile-butadiene rubber) in Europe. Effective June 15, price per tonne has rises to 210 euros. Lanxess claims the increase is “unavoidable” as costs for raw materials have risen significantly.

17th June 2010/by Tyrepress Editors

Michelin Going the Distance for Samworth Brothers

Samworth Brothers are, as Tyres & Accessories reported in February 2008, well acquainted with receiving high mileage from their Michelin tyres. Now the tyre maker reports that the chilled consolidator has clocked up more than 723,000 km on a set of Michelin XDE2+ drive axle tyres which were fitted as original equipment on a MAN TGA 26.440 6×2 tractor unit it operates. The tyres were removed at 723,417 km, with 4mm of tread remaining, and regrooved for a second life. It is expected that the regrooved tyres will cover up to an additional 180,000 km before being returned to Michelin for remoulding into Remix tyres.

14th June 2010/by Tyrepress Editors