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Global Off-Road Shortage

(Australia/Tyre Review) There is no immediate end in sight to the global off-road tyre shortage, according to a recent report from Australia, and most tyremakers in Australia say things will remain tight for at least another year – perhaps longer.

According to the news report, the causes of the shortfall include the Chinese economy, which is taking large numbers of OTR tyres directly, heavy Chinese demand for raw materials which has increased demand for rubber-tyred mining equipment, worldwide rubber shortages, and a lack of investment in expanding tyre production.

30th March 2005/by Tyrepress Editors

Apollo Tyres Gains Buy Rating

The Hindu Business Line newspaper has given Apollo Tyres its ‘buy’ rating. Though the performance of the Indian tyre companies have not been overly impressive in recent quarters, the situation is likely to improve, the report added, suggesting that Budget proposals along with the price hikes effected in the past would have a positive impact on tyre companies’ earnings.

21st March 2005/by Tyrepress Editors

Indian Budget: Good News For Tyre Business

The new year, or at least the new financial year, will give the Indian Tyre industry something to cheer about. That is since the government published its Central Budget for 2005/2006 financial year and the and excise and customs relief that came with it, Rubber Asia reports.

11th March 2005/by Tyrepress Editors

Michelin Worries About Raw Material Prices

During last week’s Geneva Motor show Michelin is reported to have said that the situation surrounding raw materials is “very worrying” and rising prices will continue to place severe pressure on the company during 2005.

“This year, the environment for raw materials remains tense, which is causing strong pressure on prices, and as a consequence on our costs,” said research and development director Didier Miraton in Geneva.
“There is no situation of us having a shortage but the tension is very worrying,” he added.

Michelin has decided to raise prices by an average of five per cent in Europe until July 2005 to offset increased raw material costs. Miraton said he expected the situation to continue as mobility needs in Asia would drive demand, stressing that there was “a need to find ways to make better use of raw materials”.

7th March 2005/by Tyrepress Editors

Sibur Discusses Future with Dealers

Russian tyre company, Sibur, has conducted a conference for its dealers in which to discuss the future development strategy of the business and to form a plan to increase the effectiveness of the regional commercial partners.

The company directors gave a presentation on the current state of the business, emphasising that an increase in the effectiveness of the tyre business is the company’s top priority. The company has already initiated a new development strategy for the tyre business in April last year, in order to improve the quality of production and to meet the requirements of today’s market.

25th January 2005/by Tyrepress Editors

Bridgestone’s Shares Fall

Bloomberg has reported that Bridgestone Corporation shares fell by up to two per cent after the Nihon Keizai newspaper reported that the company is expecting its first decline in pretax profit in four years. Bridgestone stock fell by as much as 40 yen to 1990 yen after gaining 42 per cent during the course of the last year.

The Nihon Keizai reported that the tyre manufacturer’s pre-tax profits are likely to fall by 17 per cent to 150 billion yen (£763 million) because of an increase in the price of oil and other raw materials. The newspaper did not specify where it obtained its information. “It is based on the newspaper’s own reporting,” Bridgestone’s spokeswoman Setsuko Ozaki said, declining to comment on the report.

According to Bloomberg, Bridgestone’s 2005 sales may rise 4 per cent to 2.5 trillion yen. Bridgestone may also report a record group net income of about 140 billion yen, up 30 per cent, after changing its employee pension fund system, the Nikkei newspaper said.

Last month Bridgestone said it would raise the price of its tyres in 2005 in order to protect earning from rising raw material costs. Bridgestone and Firestone branded tyres used in passenger cars, trucks and buses will rise by between 5 per cent and 10 per cent, the Tokyo-based company said on 8 December.

5th January 2005/by Tyrepress Editors

Alcoa Acquires Samara and Belaya Kalitva Facilities from Rusal

Alcoa has announced that it has proceeded with its purchase of Rusal’s fabricating facilities in Samara and Belaya Kalitva in the Russian Federation. One of the two plants will be used for forged wheel production.The news following approval of the relevant Russian governmental organisation, the Federal Anti-Monopoly Service (FAS). This resulted in an FAS private ruling stipulating condition to ensure that Alcoa complies with its legal requirements and notification obligations. With the final government approvals in place, Alcoa and Rusal say they are taking the necessary steps to complete the transaction.

According to the companies, the terms of the transaction will be disclosed when the deal has been completed, which is expected at the end of January 2005. “The decision is an important step forward for both Alcoa and for Rusal,” said Alexander Bulygin, Rusal’s CEO. “For us, it means we can move ahead with our strategic focus on upstream and alloy production, and on expanding our raw materials access. We welcome Alcoa to Russia and anticipate continuing close relations in the future.”

The Samara facility is located about 500 miles southeast of Moscow. It features cast house, flat rolled products, extrusion, and forging capabilities and serves customers in a number of different markets, including transportation, packaging, and industrial products.

The Belaya Kalitva facility is located about 500 miles south of Moscow. The facility also features cast house, flat rolled products, extrusions, tubes, and forgings capabilities. The Belaya Kalitva facility has specialised plate rolling and finishing equipment that will complement and increase Alcoa’s present supply position. Alcoa claims that with its know how and management systems, the plant will not only be able to expand the product offerings for Russian customers but also will eventually be able to produce products for major customers in the west.

4th January 2005/by Tyrepress Editors

The Effects of Raw Material Price Increases

Minekazu Fujimura, CEO of Bridgestone Europe has warned that China’s production explosion is causing a severe shortage of steel cord, natural rubber and other raw materials, essential to tyre production.

Mr Fujimara told the Financial Times that the shortage has already driven up tyre manufacturers’ raw material costs by between 10 and 15 per cent, adding that further increases were inevitable. But it isn’t all bad. In the short term, Mr Fujimura conceded, the supply problems were proving to be financially beneficial. So far this year, the leading tyre producers have been able to raise their prices three times in acknowledgment of the rising cost problem.

As a result the big producers have reported improved results. Bridgestone itself has just reported operating income of $983m on sales of $12.6bn in the first three quarters. Goodyear this week reported a profit of $36.1m for the third quarter, its second successive quarterly profit after a long period of losses.

But Mr Fujimara is not resting on his laurels. “The problem is global and there is no escape from it. We have no choice but to pay the premium,” he said adding that the increases are likely to have a wider impact. “They will be working their way through into higher car prices,” said Mr Fujimura.

9th December 2004/by Tyrepress Editors

Mario Marangoni Inducted Into Hall of Fame

The TIA has inducted Mario Marangoni into the TIA Hall of Fame. At the beginning of November, during the SEMA show, the TIA made the award in order to recognise the company president’s “leadership and entrepreneurial ability.” As a company, Marangoni sees the award as an achievement that recognises the success of the Italian tyre industry in addition to its international business.

17th November 2004/by Tyrepress Editors

Yokohama’s Income Decreases

In its third quarter Yokohama Rubber saw net sales rise by 4.3 per cent to ¥189.7 billion. The company claims that this reflected “solid tyre sales overseas.” However, net income fell by a massive 51.6 per cent, to ¥719 million. The manufacturer claims that this was due to inventory losses and a loss on devaluation of securities investment.

Operating income also declined by 6.3 per cent to ¥4.3 billion, and has been put down to the increase in prices of natural rubber and other raw materials. Yokohama is also citing higher logistics costs stemming from increased export volume and a jump in shipping charges to the decline in income.

12th November 2004/by Tyrepress Editors

Bridgestone’s Financial Results

Bridgestone has released its unaudited consolidated business and financial results for the first three quarters of the present fiscal year ending 30 September. In its tyre segment it recorded operating income of $983 million on sales of $12.6 billion. The manufacturer claims “strong sales supported by surging demand, mainly in markets outside Japan, offset the effect of rising raw materials costs on profitability.”

8th November 2004/by Tyrepress Editors

Matador and ATC In Slovak-Ethiopian Joint Venture

July 2004 saw the completion of a joint venture between Slovakian tyre manufacturer Matador and the Addis Tyre Company (ATC) of Ethiopia. The initial discussions began in the year 2000 when Matador management visited Ethiopia to talk about mutual co-operation and technology transfer.

A basic agreement was signed in July 2002 between Matador, ATC and Addis Ababa and Public Enterprise Supervising Authority (PESA) to establish a joint venture with capital inputs for the production and sale of bias ply truck tyres, bias ply light truck and passenger car tyres, plus radial passenger car tyres.

Matador sees the joint venture as an opportunity to develop the Addis factory and at the same time to take advantage of reduced operating costs. The Puchov plant is scheduled to cease production of bias-ply tyres by the end of March next year, which will enable capacity to be increased in passenger and light truck radial and obviate the need for redundancies.

April this year saw the signing of the “Agreement on the Establishment of Matador-ATC Joint Venture for the Production of Tyres” at a ceremony at the Sheraton Hotel in Addis Ababa. Capital holdings in the JV are 61 per cent Matador and 39 per cent ATC. The agreement was signed by Mr Ing Stefan Rosina, president of Matador and Mr Ato Girma Biru, minister of industry and trade for the Ethiopian Federative Democratic Republic (EFDR).

The latest meeting was held in early July to launch production of the tyres and this time Matador was represented by Mr Ing Stefanom Rosinom, chairman of the board of directors of Matador and Doc. Stefan Prekop, general director. The Slovak delegation was received by the President of the EFDR, Mr Girma Wolde-Giorgisa.

President Mr Girma Wolde-Giorgisa said: “Ethiopia is the heart of the African continent and its development and prosperity depends on the increase of the technological level of industry, education, know-how and capital imports from foreign investors. I believe that the successful establishment and functioning of the Matador – ATC joint venture will become an example and a challenge for other foreign companies. I am glad that Matador has established its activities in our country” he concluded.

For Matador, Mr Ing Stefan Rosina said that the company “had found good partners in Ethiopia.” He added: “Conditions of business oriented towards the development of the domestic industry and market are good, but also conditions of export possibilities and the purchase of raw materials. I am convinced that the joint venture will achieve a good standing and importance like our joint venture in Omsk, Russia.”

3rd November 2004/by Tyrepress Editors

India’s Apollo Tyres’ Sales Jump

Indian tyre Manufacturer, Apollo Tyres is expecting sales to increase 18 per cent, a company official has said. Last year the company recorded sales of 23.14 billion rupees and this year expects to see sales rise to almost 27.3 billion rupees, nearly £327.8 million.

“We will maintain 18 per cent growth in sales. It would be more than double of the projected industry growth rate of 8 percent,” Neeraj Kanwar, chief operating officer at Apollo, told a news conference. At the same time Mr Kanwar warned that the profit margins of tyre companies are under pressure due to spiralling costs of raw materials.

2nd November 2004/by Tyrepress Editors

Bandag to Supply Volvo Fleets

Bandag has announced that Volvo has selected it as its pan-European tyre-retreading partner. Under the new agreement, Bandag will supply retreads to Volvo Trucks workshops.

28th October 2004/by Tyrepress Editors

Cooper Reports ‘Exciting Quarter’

Cooper Tire and Rubber has reported a 6 per cent year-on-year increase in its net sales, breaking its previous record for tyre operations.

22nd October 2004/by Tyrepress Editors