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Tyre Shortage Set to Continue

We 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.

17th February 2006/by Tyrepress Editors

Strike Continues at Firestone’s Liberia Plantation

Despite 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.

13th February 2006/by Tyrepress Editors

Bandag Net Earnings Halve

Bandag 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.

3rd February 2006/by Tyrepress Editors

Chinese Boom Depletes Global OTR Markets

Recently 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.

3rd February 2006/by Tyrepress Editors

Goodyear to Announce Record Sales, Analysts Say Sell

Goodyear 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.”

31st January 2006/by Tyrepress Editors

New Earthmover Products from Goodyear

In 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.

26th January 2006/by Tyrepress Editors

Apollo Sets its Sights on Dunlop Zimbabwe

Life 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.”

19th January 2006/by Tyrepress Editors

Name Change Reflects ‘Greener’ Outlook in China

The 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.

12th January 2006/by Tyrepress Editors

SIBUR-Russian Tires Formed

Sibur-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.

9th January 2006/by Tyrepress Editors

Kraiburg Increases Prices

Effective February 2006, Kraiburg Austria will be increasing its prices for quality tyre retreading material by five per cent in Central Europe. This is down to continuing rising energy and transport costs as well as the drastic rise in the price of raw materials with, for example, natural rubber currently costing around 40 per cent more than in August 2004.

19th December 2005/by Tyrepress Editors

What Do You Think About Price Increases?

Tyres & Accessories recently asked its diverse readership – comprising of manufacturers, wholesalers – retailers and everyone in-between, what they thought about the recent spate of price increases. For their part the manufacturers claim rocketing raw material prices have forced them into a corner, with regard to end-product price increases. However wholesalers and distributors are likely to feel that these increases are an attack on their margins, which can only be remedied by passing the cost onto the consumer, therefore making retail more difficult.

T&A asked readers: Are price increases a necessary evil, or just the result of prudent financial planning on the part of the manufacturing business? 60 per cent of those that responded put price increases down to the nature of supply and demand, while the remaining 40 per cent said manufacturers had more ‘business orientated’ motives.

2nd December 2005/by Tyrepress Editors

Continental Asks for 35 per cent Pay Cut

Continental Tire North America has asked 1,000 employees at the company’s Charlotte plant to give up 35 per cent of their pay and benefits by January. If the workers’ union doesn’t agree, the company is ready to immediately cut the plant’s production by 30 percent, and hasn’t ruled out closing the plant altogether, the Charlotte Observer quoted chief executive Alan Hippe as saying. The plant’s union leaders have not yet made a decision on the request.

2nd December 2005/by Tyrepress Editors

Michelin to Hold-Off Price Rises in Europe

Michelin does not envisage raising prices in Europe at the moment, despite price increases in North America and Japan. “Our philosophy has not changed, we reflect the rise in the prices of the raw materials in our selling prices,” Reuters quoted one Michelin spokesperson as saying. Michelin’s last price increase in Europe was a year ago.

1st December 2005/by Tyrepress Editors

“NR Price Rise has Cost Indian Tyre Industry 8.8 billion Rupees a Year”

(India/Rubber Asia) With annual consumption by the Indian tyre industry of over 400,000 tonnes of natural rubber (NR), “a price increase of just 1 a kilogram, imposes an annual financial burden of over 400 million rupees on us,” says Paras K Chowdhary, CMD of Ceat Tyres and chairman of Automotive Tyre Manufacturers Association (ATMA) of India.

The average price of NR has gone up from 39.17 rupees/kilo in 2002-03 to 63 rupees in 2005-06 (October) — an increase of 23 a kilo in about three years. This translates into about 8,800 million rupees annual financial burden on the Indian tyre makers, he said. (1$ = about 44 rupees).

29th November 2005/by Tyrepress Editors

Allan Morris Transport Switches to Bridgestone

Chester-based Allan Morris Transport, established in 1893 and one of the oldest transport companies in the UK, has switched to Bridgestone and its independent Truck Point dealer network for its tyres and tyre management services.

28th November 2005/by Tyrepress Editors