Federal to Raise Prices
(Akron/Tire Review) Federal Tire Corp. announced it would increase prices by 5 per cent to 8 per cent across its full line of tyres, effective 1 April.
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CTNA Plans to End Charlotte Production
Product NewsContinental Tire North America (CTNA) says it will suspend production at its Charlotte, North Carolina tyre plant in mid-September. CTNA has already threatened to cut production in half at the plant, laying off some 513 workers in total over two separate reductions, the first scheduled to take place 15 March and the other in June.
“Due to skyrocketing costs for energy, raw materials and health care, CTNA cannot continue to operate the Charlotte plant with our current manufacturing cost structure,” said Alan Hippe, CTNA’s president and CEO. “Because we have so far been unsuccessful in restructuring our labour agreement with the union to significantly reduce manufacturing costs, CTNA must take immediate steps to reduce its costs.”
Nizhnekamskshina Slows Production in January and February
Product NewsDuring January and February of 2006 JSC “Nizhnekamskshina” says it produced 100,000 less tyres than planned. According to the company, the basic reason for the disruption was the high rubber price. The beginning of March has not proved to be much better for Russia’s largest domestic tyre producer. In Nizhnekamskshina’s words the situation “remains complex” due to short supplies of natural rubber.
Indian Government Joins the IRSG
Product NewsThe International Rubber Study Group has announced that the Government of India will join the Group on 1 April 2006. India’s total rubber consumption has been increasing steadily since 1960 at a rate of 6.8 per cent/year to reach 968,000 tonnes in 2004. This makes India the fourth largest rubber consuming country, behind China, the USA and Japan.
“Good Alternative to Vehicle Breakdown“
Product NewsIts not just new tyre manufacturers and retreaders that are benefiting from booming OTR tyre sales. Businesses such as Stahlgruber’s Tip Top division have benefited from the recent increase in demand. The demand for tyre repair systems has multiplied over the last year, export manager Maximilian Spenger says. Today it is an absolute priority for users of OTR tyres everywhere to “keep the tyres going somehow.” At Tip Top’s headquarters near Munich those in charge are reacting quite calmly to the current situation because the market changes did not go unforeseen.
Customers Discover OTR Tyre Retreading
Product NewsNot everything that’s bad for the OTR end consumer is automatically bad for the retreaders of these tyres, too. On the contrary, sometimes it could even help them increase their sales figures substantially. In earlier years tyres for earthmovers have literally been driven run-through. Today, consumers “somehow try to keep them rolling” for as long as possible admitting that they have paid good money for a good product. As a consequence, the Rösler group – market leader in Europe in this OTR niche – has been able to increase its annual number of retreads by about 30 per cent. On the one hand this growth has been induced by the general market expansion, on the other hand sales figures have been triggered by increasingly urgent demand on the part of the customers that were unable to get hold of any new OTR tyres whatsoever.
Tyre Shortage Set to Continue
Product NewsWe hear so much about overcapacity in the tyre industry, with too many tyres chasing too few wheels, but this is not the case in all sectors and certainly not in the OTR/Earthmover tyre market, where words and phrases such as “crisis” and “global shortage” are freely bandied about.
Reports suggest that there is little prospect of improvement in the short to medium-term, with the entire global OTR tyre production for at least the next couple of years having already been sold. One prediction, from the UK’s OTR Tyres, forecasts that demand will exceed supply through to 2010.
Strike Continues at Firestone’s Liberia Plantation
Product NewsDespite earlier reports that workers had gone back to work, one week into the strike company officials told Tyres & Accessories that while the industrial action “could end tomorrow, it could also go on for weeks.” In an interview with T&A, Bridgestone Americas’ Dan MacDonald and Gert Meylemans (Bridgestone Europe) explained that the ongoing strike might mean there is disruption, but it also unlikely to have any long term or direct effects on prices.
Despite the plantation’s size (118,000 acres) the company representatives downplayed the effect the strike would have on the tyre market. “The majority of what is harvested is not block rubber, but liquid latex,” Dan MacDonald told Tyres & Accessories. Instead the Liberian plantation’s output is only said to make up 14 per cent of Bridgestone Americas’ and 1.2 per cent of the company’s worldwide demand. For now there is said to be significant quantities of the necessary raw materials in reserve. And the executives pointed out that the company ran other large plantations in places like Indonesia. Reserves and alternative sites aside, 5,800 striking workers is not good for any company.
Chinese Boom Depletes Global OTR Markets
Product NewsRecently the global mining industry has had to face a new obstacle. And it has nothing to do with a lack of demand for the raw materials that this business harvests from the earth. Far from it. In the wake of economic expansion in Asia and America, global demand for raw materials has increased rapidly. Order books are full. Despite this, without an integral component, some mining companies have been brought to a standstill. Like cars, earthmovers and other off-the-road (OTR) vehicles cannot go anywhere without tyres.
The chronic shortage of the right kind of rubber for these, often enormous, vehicles means wheel loaders, earth movers and other quarry, mine and dump orientated machines are increasingly rolled out to customers shod only with wooden bandages designed to protect the rims. Frustrated at the pace of delivery, some mine and quarry operators have even sourced new tyres from the tyre trade themselves, new tyres that are intended to fit newly bought vehicles. Although now, even the tyre trade is finding it difficult to offer anything in this respect.
Bandag Net Earnings Halve
Product NewsBandag Inc’s fourth quarter 2005 net earnings slid to less than half of their 2004 level despite strong net sales of $252.3 million (£142 million), up seven per cent. Consolidated net earnings totalled $12.1 million, compared with $30.8 million in 2004. According to the company, net sales were positively impacted by foreign currency translation to the tune of approximately $3.5 million.
Announcing its full-year 2005 results, Bandag reported consolidated net sales of $914.6 against $864.3 million in 2004. Consolidated net earnings for 2005 were $49.5 million compared to $66.9 million in 2004.
Goodyear to Announce Record Sales, Analysts Say Sell
Product NewsGoodyear Tire & Rubber Company says it anticipates record sales of almost $20 billion (£11.27 billion) for 2005, with more than $4.9 billion for the fourth quarter. Despite this market analysts, Deutsche Bank, have downgraded their stock rating for the company to “sell.” In addition to record sales, segment operating income is expected to be up between 20 and 25 per cent from 2004.
The manufacturer says it expects fourth quarter segment operating income “to approximate the $238 million achieved in the prior year period.” After deducting $20 million in corporate and general expenses Deutsche Bank estimates consolidated EBIT will come in at “roughly $218 million, well below their $283 million estimate.”
New Earthmover Products from Goodyear
Product NewsIn the last few years Goodyear has launched a range of new products in the earthmover market such as the RT3B for wheel loaders; the TL3A+ for wheel loaders and articulated dump trucks; and the RT-5C – the 250 level traction wheel loader tyre that has also proven highly successful in grader applications in size 25.5R25. Other products include the RT4A for rigid dump trucks.
Apollo Sets its Sights on Dunlop Zimbabwe
Product NewsLife has been hard for Dunlop Zimbabwe in recent months, now the company is being targeted for takeover by India’s Apollo Tyres, it has emerged. Dunlop International CEO Mark Hankinson is expected to travel to Harare in the next two weeks, the Zimbabwe Financial Gazette reported. Hankinson, whose group controls 75 per cent of Dunlop Zimbabwe is quoted as saying “We are talking to a number of people.”
Name Change Reflects ‘Greener’ Outlook in China
Product NewsThe China Tire Retreading and Utilization Association has changed its name to the China Tire Retreading, Repairing, and Recycling Association (CTRA), in response to a challenge from central government to move towards a resources-saving society and recycling economy.
SIBUR-Russian Tires Formed
Product NewsSibur-Holding has completed the formation of Sibur-Russian Tires and has transferred stakes in companies to Sibur Russian Tyre’s books. Omskshina, Yarshina, Voltyre-Prom, Matador-Omskshina and Uralshina Saranskrezinotehnik now all come under the news name. “In 2008 the new holding is planned to be sold wholly or in parts, also a possibility of an IPO is considered,” Russian analysts added.
