Raw Materials
Addressing the company’s Annual Shareholders’ Meeting, held in Hannover, Germany on April 28, chairman of the Continental AG Executive Board, Dr. Elmar Degenhart, stated “if you wanted to summarise the year 2009, you could boil it down to a simple notion – state of emergency.” The major events affecting the market, he added, resulted in the most dramatic economic crisis in the post-war era.
On April 28 Bridgestone held an opening ceremony for its Global Manufacturing Education Center (G-MEC) in the Bridgestone G-MEC Building, a training building established in Kodaira City, Tokyo. The ceremony, held at the newly opened G-MEC Building, marked the official launch of the new G-MEC training and education programme.
With tyre businesses forced to face the unprecedented combination of global recession, high raw material costs and increasingly thorough legislative demands, the two years since the last Essen show have been some of the toughest in the market’s history. And yet, if you will excuse the pun, the tyre business seems to have a perpetual ability to “bounce back” in the face of adversity. In fact some brands – largely those operating in the mid and upper mid range segments – actually outperformed their pre-recession sales records, resulting in increased market share at least in terms of units sales.
That said, all businesses have had to cope with the same credit crunch-induced reticence amongst consumers to spend any money at all, while at the same time having to deal with (either directly for the manufacturers or indirectly for those importing, wholesaling and trading) high input costs for raw materials such as natural rubber.
The price of certain Bridgestone, Firestone and associate brand passenger car and light truck tyres will rise by up to six per cent in the US market on June 1. Bridgestone Americas Tire Operations (BATO) says these increases will apply to both original equipment and replacement market products.
Denmark-based Genan Business & Development A/S, which purports to be the world’s largest tyre recycling company, has appointed Barry Stocker as sales director for UK and Ireland. According to the company the appointment took effect on 1 February 2010. At the time Stocker was president of the Tyre Recovery Association (TRA) and member of the UK Tyre Working Group, however Tyres & Accessories understands that the association has since appointed a new president and will shortly release a statement confirming this. Prior to joining Genan Stocker was commercial director for Murfitts Industries Ltd and spent most of his professional career within tyre recycling in the UK.
Bridgestone has said that it will produce 1,500 more tyres per day and raise the price of its tyres by 3.5 per cent in India, according to a newswire issued by Dow Jones. The rise comes on the back of increased raw materials prices, Bridgestone India general manager of sales and marketing, Vaibhav Saraf told the assembled throng at a news conference, Dow Jones NewsPlus reports.
Brazilian company Vipal, best known for its tyre retreading and repair materials, and Argentine tyremaker Fate have signed a memorandum of understanding with the Rio Grande do Sul State of Southern Brazil to set up a new tyre factory. The first bi-national industrial collaboration in the state, the Vipal/Fate project sees the companies invest around US$200 million in building a “farm equipment” and “aftermarket car parts” tyre plant. There has been no official confirmation of what brand the new tyres will be produced under, but Tyres & Accessories understands that this means production will focus on passenger car and van tyres.
Nigel Lewis, currently purchasing director for Avon Tyres in Melksham, will as of June 1 take on the role of managing director of Cooper Tire International Trading Company in Singapore. In this capacity he will be responsible for overseeing the operations of the Singapore buying office and procurement of natural rubber.
As of June 1 prices for Continental’s summer tyres will increase by an average of three per cent and winter tyres by an average of five per cent. The announcement made by the manufacturer on April 21 only refers to the German market, however Dr. Hartmut Wöhler, Conti’s head of Marketing and Distribution for the Car Tyre Aftermarket in Europe and Africa, stated the company is “currently preparing to implement these price increases right across Europe.”
Nankang Rubber Tire Corp., Ltd has increased production prices across its entire range of passenger, 4×4, SUV, van and snow tyres effect 20 April. Nankang said the price increases are due to the escalation of raw materials and energy-related expenses. “We appreciate the support and understanding of our customers. It was a very difficult decision to raise prices, and we need relative income to maintain same service to our valued customers,” said Eric Shih, Nankang Tire manager of export department. According to the company, Nankang last raised prices in November 2009.
Located in Beijing, Best Choice is a leading international tyre wholesaler in China having long term close cooperation with domestic manufacturers and overseas tyre distributors. "Best Choice is able to offer a range of excellent quality products that are economically priced. In 2009, the company exported over tyres to the value of over 50 million US dollars," said managing director Stephen Wu.
Hankook Tire has announced it will double its manufacturing capacity to 10 million tyres per annum by 2011, employing a further 700 skilled workers at its plant in Hungary. 450 new staff will be taken on in 2010 and 250 in 2011. The Korean company said it was “committed to long-term investment in Hungary”, a statement it supports with the tyre manufacturer vocational education and training programme it launched in cooperation with Regional Labour Offices and Lorántffy Zsuzsanna Secondary School in 2009.
Ecological friendliness may not be the first characteristic one would stereotypically think of to describe sports utility vehicles, but Italian tyre manufacturer Pirelli believe it has spotted an opportunity within this seeming anachronism. The company launched its new road-biased Scorpion Verde tyre, developed to meet what it perceives as the SUV market’s need for increased fuel efficiency. With more than just one eye on upcoming tyre labelling regulations, Pirelli claims that the Scorpion Verde boasts greatly improved rolling resistance from previous high performance SUV offerings, making it “the first high-performance eco tyre for vehicles with the highest environmental impact – SUVs and Crossovers.”
Nokian Tyres has opted to raise prices in June after almost doubling estimates for the cost of raw materials this year. Nokian Tyres estimates that its raw material cost (EUR/kg) in 2010 will increase by 10-12 per cent compared to 2009 (the company’s previous estimate was 6 per cent) due to significantly increasing raw material prices. According to the company, this will affect its financial results in the second half of the year.
Based on the theme of “Interpreting Industry Legislation and Regulations, Exploring Cutting-edge Technologies and Trends,” event organisers are publicising plans for the second annual Tire Technologies Congress in Shanghai, China. As you might expect the conference will focus on the most controversial legislation and trade issues, but there are will also be technology sessions.
Organisers JFPS Group report that the event will centre on speech delivered by over 20 general managers and research and development directors from leading tyre companies such as: Bridgestone, Goodyear, Giti Tire, Pirelli Tyre, Cooper Tire, SIBUR – Russian Tyres, Apollo Tyres, Toyota Motor Corporation, Dunlop Aircraft Tyres, Doublecoin Tire, Guizhou Tire, Yellow Sea Rubber, South China Tire & Rubber, Hangzhou Chaoyang Tire, Aeolus Tyre, China National Tyre & Rubber Guilin, Bayi Tire.
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