Raw Materials
(India/Rubber Asia) Indian tyre prices are likely to go up by 4 to 5 per cent in the coming days, according to Mr. Onkar S Kanwar, chairman of Apollo Tyres Ltd. Rocketing prices of raw materials such as natural rubber, carbon black and other petroleum products, plus the existing duty structure which impacts the profitability of companies are the reasons for the impending tyre prices hike, he says.
Australia’s Ansell Ltd has slashed the value of its tyre-making joint venture with Goodyear Tire & Rubber Co by more than half, citing the impact of an influx of cheaper imports and rising raw material costs. In a move largely factored into analysts’ estimates, Ansell said it plans to write down the carrying value of its investment in South Pacific Tyres, or SPT, by $80 million Australian dollars to about A$58 million.
(Akron/Tire Review) Goodyear Tire & Rubber Co has agreed to sell its Wingtack adhesives resins business to Sartomer Company Inc, a unit of the French energy firm Total SA, for a reported $65 million. The sale includes a production facility in Beaumont, Texas, adjacent to Goodyear’s synthetic rubber plant there.
Goodyear said it will continue to supply raw materials to the adhesives resins plant. The adhesives resins business, with 115 employees, produces Wingtack brand hydrocarbon resins, which are used in pressure-sensitive and hot melt applications.
India’s Apollo Tyres has reported that it achieved record sales in the fourth quarter of its 2004/2005 financial year. At the same time the company announced a 45 per cent dividend. For the 2004/2005 year Apollo Tyres Ltd posted a gross turnover of 26.56 billion rupees (£332 million), a 15 per cent growth over the previous year. The company also registered the highest quarterly sales achieved in its history – over 7.5 billion rupees in the last fourth quarter. This represents 21 per cent growth over the same period last year. At the same time the company maintained three per cent net profit.
(Akron/Tire Review) The “Stop Counterfeiting in Manufactured Goods Act”, introduced by Rep. Joe Knollenberg (Republican) with the support of the Motor & Equipment Manufacturers Association (MEMA), has passed the US House of Representatives.
For the year-ended December 2004, Goodyear India recorded a turnover increase of 26 per cent to 7.031 billion rupees (£88.3 million), while the operating profit margin dropped to 3.6 per cent from 4.7 per cent. Helped by the sharp drop in the interest costs, the post-tax earnings rose to 52 million rupees from 10 million rupees the year before. The company repaid high-cost debt by borrowing from its parent Goodyear Tire, US. As a result, the interest cost dropped to 75 million to 133 million rupees.
(Akron/Tire Review) According to a report by Queensland Newspapers, Bridgestone Australia shareholders failed in a bid to oust members of the company’s board of directors at the firm’s annual meeting 9 May. Meanwhile, Bridgestone Australia chairman and CEO Makio Ohashi told shareholders that the financial situation wasn’t going to get better, warning of continued lower profits because of escalating raw materials costs and competition from imports.
(Akron/Tire Review – courtesy of China Daily) Manufacturing in the dozen countries sharing the euro declined for the first time in almost two years in April, adding to signs that record oil prices are dampening economic growth.
An index based on a survey of about 3,000 purchasing managers compiled by NTC Research Ltd. for Reuters Group Plc fell to 49.2 from 50.4 in March, according to figures available on the Internet yesterday. Economists forecast a decline to 49.8, the median of 35 forecasts in a Bloomberg survey showed. The index hadn’t dropped below 50 since August 2003, something that is indicative of contraction.
(Akron/Tire Review) Wherever the market for new truck tyres decides it is headed, the retreading industry is hot on its heels.
Of course, that job is a bit easier for Bridgestone/Firestone, Goodyear and Michelin, because they are involved in both. But even their allocation of time and money must be measured carefully. For companies like Bandag Inc. and Oliver Rubber Co. – despite its connection with Cooper Tire & Rubber Co. – the task is a bit more daunting. But they, too, are highly skilled at knowing what to do and when.
(India/Rubber Asia) Cheap imports from China and to a lesser extent from Thailand and South Korea, coupled with rising raw material costs are posing a serious challenge to the Indian tyre industry, Apollo Tyres chief operating officer Mr Neeraj Kanwar has said.
It would be something of an understatement to say that high raw material costs, the weak dollar and unprecedented competition from the Far East is affecting UK alloy wheel manufacturing. But, in the cases of the selection of companies that Tyres & Accessories spoke to, it is more a question of ingenuity triumphing over adversity. So, in the face of such pressing circumstances, how are UK manufacturers holding firm? Work smarter, not necessarily harder, they say.
(Akron/Tire Review) Kumho Tire USA plans to increase prices on passenger, light truck and commercial truck tyres from the first of June. Depending on the type of tyre, prices will increase up to by up 8 per cent, according to the manufacturer. Continuing price increases for raw materials and rising shipping costs were the reasons cited by David Hudrlik, vice president and director of sales at Kumho. The last time Kumho raised prices was 1 October 2004.
By Alex Law
MacLeans magazine
“Nunc est bibendum.”
Horace originally meant that to be a call to merriment, or, in a more literal translation, “Now is the time to drink.”
When Michelin first used the phrase decades ago on an advertising poster, it was the tagline to a sketch of a man made out of tyres (now known as Bibendum) who was looking down a stretch of pavement filled with the kind of debris normally found on the world’s roads at the time. The message then meant, “I can handle all that.”
(Akron/Tire Review) Goodyear Tire & Rubber Co.’s push into the Chinese market will include a significant increase in its purchasing there, according to reports in China Daily. Chairman and CEO Robert Keegan was in China last week to announce Goodyear’s planned move of its Asia-Pacific operational headquarters from Akron to Shanghai.
Goodyear Tire & Rubber Co, will increase buying in China to a tenth of its global sourcing by 2010 from just 1 per cent now. That could boost sourcing in China to about $800 million within the next five years, chief executive Robert Keegan told Reuters, as the firm, which carries a heavy debt load, strives to lower costs.
“We purchase about $8 billion of both raw materials and other products and services…10 per cent would be $800 million, so it’s a considerable increase for us,” Mr Keegan said. The American firm is racing against rivals Michelin and Bridgestone Corp to supply China’s $6 billion tyre market, which state media has said is half controlled by foreign companies and grew about 30 per cent to some 239 million units in 2004.
Keegan said the firm would invest $120 million to double the capacity of its factory in the northern port city of Dalian to 5.3 million tyres annually. The expansion is expected to be completed by early 2007, he said.
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