Tyres can’t function without this critical raw material. Whether its natural or synthetic rubber you are interested in, articles bearing this tag feature this indispensable polymer.
(Akron/Tire Review) Cooper Tire & Rubber Co has made three appointments to its North American tyre-marketing group. James Keller was vice president of marketing for North America, Philip Kortokrax was appointed general manager for Cooper’s Mickey Thompson Performance Tires and Wheels unit, and Christopher Pantani was named director of UHP marketing and business development.
(Akron/Tire Review) For the second time in as many months, Titan International has extended the deadline for completion of its purchase of Goodyear Tire & Rubber Co. agricultural tire business. It is believed that the second extension – until 1 October – is due to slow moving negotiations between Titan and the United Steelworkers (USW).
Under terms of the contract it signed with Goodyear in 2003, any company purchasing a USW-represented Goodyear plant must negotiate a new deal with the union before the sale can be consummated.
The purchase, announced last February, includes Goodyea’rs agricultural tyre plant in Freeport, Illinois.
Goodyear Tire & Rubber Co has completed the sale of its Wingtack adhesives resins business to Sartomer Company Inc., a unit of the French energy firm Total SA.
Recycling has not only become more important to the public, but to the tyre industry too. Tyre recycling has a lucrative future, and tyre shredding is fast becoming a money-spinner for those companies involved. The choice of tyre shredding and recycling equipment manufacturers and distributors is growing, as is the range of casing collection services throughout the industry.
“However, it is one thing to realise the potential of this market but quite something else to actually set up a business that will evolve into a successful and lucrative service,” says Bob Batchford of RJB County Contractors. This is why the company has recently established a new division within the business, RJB Consultancy, to provide a service to both new and established businesses on how to achieve financial reward from tyre recycling.
(Akron/Tire Review) Reuters reported last week that a ship carrying some 1,500 tonnes of natural rubber for delivery to tyre companies ran aground off the coast of Sumatra near Indonesia. Most of the rubber was reportedly intended for Bridgestone Corp and Goodyear Tire & Rubber Co facilities in the US.
(Akron/Tire Review) According to CBS MarketWatch, Goodyear Tire & Rubber Company late Monday filed to raise $350 million in a convertible bond offering. The offer consists of 4 per cent convertible senior notes due in 2034 and shares of common stock issuable upon conversion of senior notes. Goodyear said proceeds of the deal will go to selling stockholders including the Calamos Growth & Income Fund, Citigroup and Aristeia International Limited.
(Akron/Tire Review) Toyo Tire & Rubber Co has reorganised its entire North American operations under a new umbrella company – Toyo Tires International – that will oversee all of its manufacturing, distribution and sales and marketing efforts in the US, Canada and Mexico.
The Tire Industry Association (TIA) has announced the 2005 inductees into the Hall of Fame. These are Eugene Beck Jr., president of Beck Tire International and John Sieff, retired president of S&M Tire Company and Mr. Tire Service.
This year an additional category – that of “Historical Contributors” -has been added for individuals, living or deceased, who have been out of the tyre industry for at least 20 years. There are four inductees; Fernley Banbury, inventor of the Banbury mixer, Theodore Smith, founder, president, publisher and editor of the India Rubber Review (now Tire Review) and Marius Mignol and Pierre Bourbon of Michelin, inventors of the radial tyre.
Natural rubber prices will continue to rise next year even though output from the world’s leading producing countries is expected to increase, according to an expert from the London-based International Rubber Study Group (IRSG).
As a relatively new market segment the ATV tyre sector is hard to define in terms of numbers. It is estimated that the UK ATV tyre replacement market lies between 40 to 60,000 tyres, but it’s difficult to qualify specific numbers when so few companies compile statistics. Despite this lack of information everyone involved in this area will tell you that ATV tyres, in particular the recreational types, are increasing and there is potential for much growth. Further opportunities within the segment are beginning to show themselves, giving wholesalers and retailers the chance to broaden their portfolios, but there are no realistic forecasts as to their expected success. Tyres & Accessories asks UK dealers whether the ATV tyre sector has the scope – volume and longevity – to become more than just another niche?
UK wholesaler, R H Claydon has, like every other ATV specialist, noticed an increase in sales of competition ATV tyres and believes that their volume will increase in the next two to three years. However, currently the utility side provides it with its volume sales, and the company expects this to remain the case, terming it a “drip feed” segment. According to the company’s corporate business manager, Dick Anderson, R H Claydon’s existing sales are split 90:10 (utility: recreational), but he expects this to shift in the future. Whether sales of recreational ATV tyres will ever equal that of utility the manager could not estimate, but he does believe that due to the sector’s following it will continue to grow for years to come.
Mr Anderson maintains that both the volume and longevity of the recreational ATV market are certain, but what about profit? R H Claydon broke into the ATV sports sector last year and has been joined by considerably more competitors since. The recreational ATV tyre side has, until now, been dominated by a small quantity of companies but the numbers are beginning to grow. “It’s a niche market,” claims the business manager, continuing: “however the profitability has been eroded to some degree over the last few years due to the increasing number of companies present in the market.”
David Williams, ATV department manager, Fieldens, agrees that there has been a significant increase in those involved in ATV tyres. “There was a time when only ATV centres dealt with the tyres however this has changed. Now there are many more companies offering the tyres, even retail chains, and if they don’t stock the tyre they will generally offer to find it for a customer anyway.” Both managers commented that the increasing number of ATV tyre brands on the market (especially those from China) has also had an affect on profitability. Dick Anderson added: “Margins on ATV tyres are acceptable, but have decreased as the tyre’s worth has gone down.”
If the individual profit of an ATV tyre has decreased then it is obviously important that overall volume does the opposite, and that new opportunities to make money present themselves to the wholesalers and retailers involved. According to Quad magazine’s Dave Bradford quadricycles have become a “sales sensation” in Europe and are becoming a more frequent sight on UK roads. This craze has therefore increased the need for street legal tyres; e-marked ATV rubber that offers a performance similar to a passenger car tyre. Maxxis UK estimates that currently 15 per cent of ATV tyres are used on road with the remainder used in off-road conditions. MD Derek McMartin also explained that street legal tyres have become a massive opportunity in America for the company and he expects the same to happen in Europe.
Because ATV tyres have changed in terms of usage over the last five years, the technology behind them has also had to change. ATVs initially raced on turf tyres until they became so popular that ATV racing rubber was developed. As well as that run-flats have been created for the utility sector, so both wholesalers and retailers are expecting big things when it comes to future street legal tyre development.
As far as the ATV specialists are concerned there are plenty of emerging opportunities within the segment for them to get their teeth into. But what they don’t want is every other retailer and wholesaler in the market to take a bite of the cake also! As far as the existing ATV tyre companies are concerned it is a specialist market and an area for the specialist dealer only.
“It’s very much a regionally specific market, and that makes it ideally a market for specialist farm dealers, or on the sporting side specialist ATV dealers,” maintains Mr Anderson. An ATV tyre sales person needs a “sound” understanding of the market to ensure they fulfil the needs of customer, agree both R H Claydon and Fieldens, inferring that it is not an area that simply any retailer can operate in.
According to Mr Anderson, forecasting an ATV tyre stock profile also complicates matters. “With ATV tyres you have to be able to offer a full range because demand can be very varied. It’s difficult to assess the stock profile because there may be eight or nine popular sizes in the utility segment and six in racing, but each range has its own popular fitments, and you want to be able to offer them all. We (R H Claydon) bring in our ATV tyres by container so we can offer a full range, even of the less common sizes, but not every company is in a position to do that. So it’s not an area that every wholesaler and retailer could get into.”
As both the ATV utility and recreation markets develop new branches the market certainly seems to have the capacity to sustain the expected future growth. But whether these new opportunities mature into long-term profits is difficult to estimate at such an early stage. The wholesalers and retailers certainly have faith in the niche’s permanence and future volumes, just as long as it remains that, a niche.
A sense of adventure, a crash helmet, and a certain level of balancing skills are ‘must-haves’ when taking a quad bike off-road. But with Goodyear run-on-flat ATV tyres fitted to your Kawasaki KLF400 you can leave the latter requirement behind, as amongst other characteristics, stability is one of their key features, even in extreme terrain. The tyres also afford freedom from worry and they put an end to solving stupefying situations such as how to recover an ATV vehicle with flat tyres that’s stranded in the middle of a muddy quagmire.
Despite its tyres’ advantages Goodyear is rarely talked about when it comes to ATV tyres; a market dominated by imported brands. Hence the manufacturer is keen to get a firm hold on the serious side of the ATV scene through the industry’s first run-flat ATV tyre. So serious in fact, that it invited Tyres & Accessories to compare, contrast and talk new tyre technology, during a day of quad biking.
Goodyear has been progressing the concept of an ATV run-flat since the 90s, a time when both ATV tyre sales and run-flat technology were increasing in importance. Its aim has always been to develop tyres for use on serious farm machinery, explained Goodyear Dunlop farm tyre specialist Mark Turner, and the run-flat version of the ATV tyre is a further extension of that aim.
There are two run-on-flat tyres available from the US manufacturer, the Tracker EMT, available for OE and replacement fitment and the Mud Runner EMT, designed exclusively for the replacement market. The Tracker EMT is available in 14 sizes, whilst the Mud Runner EMT is available in 10 sizes in 25-27 inches.
Like the more familiar passenger car run-flat, the ATV-EMT has a 50 mile run-on-flat capability, but only at speeds of 25mph. The sidewall reinforced tyre also mounts on standard ATV OE wheels which is key for the replacement market. In addition it offers the accustomed run-flat features such as reduction in damage to wheel and brakes as well as improved vehicle stability and manoeuvrability. With the low speeds that utility ATVs operate at there is no safety requirement for an accompanying TPMS as in the case of the car. Instead the insert contour of the tyre is designed so that the rider can feel the flat tyre whilst still benefiting from the run-flat performance.
As far as the ATV-EMT concept is concerned it appears to be a logical next step from passenger car run-flat developments. “Awareness of run-flat technology in general is increasing, they’re OE fitments are increasing on cars, and that helps sell the idea on an ATV, it’s simply a natural extension of passenger car tyre technology,” comments Mark Turner. The technology can prevent a disabling flat tyre, downtime due to repair and the need to carry repair kits. The ATV-EMT uses run-flat technology developed for the Goodyear high performance passenger car EMT tyre. It has a wide, flat bead for improved tyre/wheel retention with apex used to stiffen the sidewall and insure the correct bead shape.
The tyre was first shown at last year’s Cereals show where Goodyear provided a practical demonstration for visitors. However it has been available in the US since 1998, and was picked up by the ATV press in 2002 when a series of tests conducted by ATV Magazine declared the Mud Runner EMT as the “smoothest ride.”
Thanks to the higher margins the run-on-flats present a lucrative opportunity for dealers. Goodyear distributes its ATV tyres through national wholesalers and 10 dealers from its Farm Tyre Specialist Network. The British Rubber Company is the leading independent farm tyre specialist belonging to that network and according to Jason Reynolds the business is very successful with Goodyear ATV tyre sales. Mr Reynolds has in fact got Goodyear ATV run-on-flats fitted to his own quad bike and describes them as “marvellous” claiming that they have “transformed” the handling of his bike. “Because of the sidewall strength the tyres are a lot more rigid and stability is improved. You also have the added security that they will get you home if you get a puncture, I’ve had three punctures and each time the tyres have got me safely home,” commented Mr Reynolds.
The tyres seem to have the endorsement of the dealer but at a 20-25 per cent price mark up, is there a market out there amongst strapped-for-cash UK farmers? Jason Reynolds believes so: “Once somebody has tried the tyres and seen the difference in performance the cost isn’t really an issue. There is a market out there for them, especially with hill farmers who work 10-15 miles away from the farm, and use their ATV as a second tractor. I recently spoke to one of my customers about the tyres and they said that they’d never known a tyre last as well.”
Mark Turner also claims that the tyres are starting to sell well in the UK market, even though the manufacturer has yet to start its marketing campaign. Goodyear explains that it is now in a position where it has the stock available and can begin to push sales; needless to say ATV run-on-flats will soon be brought to the consumers attention. Goodyear’s farm tyre specialist is positive that the run-on-flats will share a similar success in the UK as they have in the US, adding that both ATV tyre and vehicle sales are growing in farming as well as in the recreational sector of the market. Goodyear’s current ATV line up may suit its farm business, but with all its tyres marked NHS (Not for Highway Service) it will not catch a glimpse of the increasing on-road sector in the near future, perhaps that will be its next move.
What better way to launch a new UHP tyre than at the home of the UK’s only US-style oval track. Rockingham Motor Speedway was the backdrop for the launch of Kumho’s latest addition, the ECSTA SPT KU31 last month, and provided international journalists and UK dealers the opportunity to race M3s around on the Korean’s new rubber. The tyre however, is only the first in a string of new products due to be released by the manufacturer this year, as Tyres & Accessories found out.
The new KU31 replaces the Supra 712 to become Kumho’s core UHP offering. The manufacturer’s aim is to capitalise on the success of the 712 whilst updating the technology and design of the tyre it positions in the premium sport section of its portfolio. The ESTA SPT will be available in 72 sizes, including 48 with extra load capability and 31 Y rated tyres, offering 90 per cent market coverage.
Of course the sport version comes with some all-new improvements but interestingly its design brief emphasis was on improving “worst-case scenarios” explains Aaron Neumann of Kumho European Technical Centre. With the worst-case scenario in Europe most likely being a high speed emergency stop on a wet road, says Mr Neumann, the ECSTA SPT focuses on wet grip performance. The tyres new features include patented rotate wear indicators, a new silica based compound and special notches to protect against water turbulence.
Highly Dispersible Silica (HD Silica) has been used to reduce hysteresis and rolling resistance and to improve the performance of the tread compound. To achieve aquaplaning resistance two large channels were created at the centre of the tyre to disperse water through the tread pattern and directional grooves were used in the shoulder to clear water away laterally. The rotation wear indicators are a series of small holes placed across the tread pattern to provide a visual indication as to the tyre wear.
The big news to come from Kumho was that it has developed a run-flat version of the ECSTA SPT tyre. The Kumho XRP features a reinforced sidewall system that will run up to 50 miles at 50 mph after losing pressure says the manufacturer. The run-flat will be progressively introduced to market over the next few months in 16-18 inch sizes and will cover fitments on Mini, BMW, Mercedes and Toyota Lexus. Kumho also claims that when tested against the leading OE run-flat tyre for the Mini its XRP “outperformed” the competition.
The development of the ECSTA SPT, its sizes and types, comes directly in response to growing European demand says the manufacturer, who wants a slice of the world’s biggest high performance market. Sales for V rated tyres in the UK have risen sharply in the last three years, according to Kumho there will be around 9.5 million of these tyres sold by the end of year. As far as run-flats are concerned the company’s research shows that 750,000 of these tyres are fitted to UK cars, the majority of which are self supporting fitments. And with a growing amount of run-flats being fitted as original equipment on BMW and Mini and as an option on Mercedes and Volvo, Kumho says that the segment is bound to increase, and it is positioning itself to acquire some of the business.
Elsewhere in the ECSTA range, new sizes of up to 22 inches will be added to the KU19 UHP tyre in the next few months. It currently features some 26 W and Y rated sizes from 17 to 20 inches. The ECSTA MX KU15 is also now available in sizes up to 19 inches. clare.atkinson@77.237.250.82
Motives in Motorsports
In 2004 Kumho recorded US $1.6 billion sales and was ranked 11th in the list of global tyre manufacturers. Its target is to move into 8th position by 2009 and it intends to increase its factories’ capacities to achieve this says Kumho UK managing director Steve Tidmarsh. The manufacturer currently has four factories, which between them produce around 36 million tyres a year. It is also in the process of building another tyre plant in China in order to achieve its goal.
Increasing capacities is only part of Korean manufacturer’s objectives; it also needs to boost the Kumho name across the globe in order to climb the ladder. The manufacturer has of course found a means to accomplish this – through world motorsport.
Kumho is still relatively new to motorsport and originally started in the UK with the MG car club. The reasons behind its involvement are obvious, it makes for good PR and there are endless marketing opportunities through which to increase brand awareness. On a practical level however the manufacturer says it has also relished the chance to test its tyres in extreme conditions and welcomes the forum motorsport has provided for it to develop technologically advanced tyres.
The Korean manufacturer became the official tyre supplier to the new F3 Euro Series in 2003. Two years on it says the investment has been worth it as the series is well established as the training ground for potential F1 drivers. British driver Lewis Hamilton is currently leading the championship and proved his worth at the F3 Marlboro Masters in June at Zandvoort where he shaved half a second off the lap record, setting a time of 1 minute 32.866 seconds, and earning the Kumho Tyres Fastest Lap award. Thirty seven drivers competed in this year’s Marlboro Masters which was watched by 40,000 spectators and was broadcast live into some 5 million Dutch homes, giving Kumho the coverage it seeks to improve brand awareness.
The event’s rules stipulate that each car is allowed to use up to three sets of Kumho S700 slicks and a batch of 800 were specially made for the Zandvoort weekend. The manufacturer’s F3 tyres are developed and tested at its technical centre and manufactured at its Gwangju factory in Korea.
“The increase in brand awareness achieved through our entry into high-end events such as the Marlboro Masters and Europe’s top F3 championship, the Formula 3 Euro Series has been significant,” reported Kumho Tire Europe’s executive director Dong-Keun Cho. “We are delighted to see that Formula 3 is just as popular in Europe as it is in Asia.”
As well as making tyres for F3, the company produces tyres for both tarmac and gravel rally, rallycross and sprint and hillclimb events. It also entered the US Le Mans Series for the first time this year
In Malaysia, Titan Chemicals Corpn. Bhd has won a contract from the Korea Kumho Petrochemical Co. Ltd. to supply butadiene; the raw material used to make synthetic rubber. The operation will begin in 2007 and the five-year contract is worth an estimated 500 million Ringgits (US$ 132.8 million)
The price of natural rubber has decreased by15 per cent to US$1.58/kg after reaching its peak of US$1.84/kg at the end of July.
Analysts believe that tyre companies should be able to offset the raw material price surge, as they did in H1, due to a hike in tyre prices.
Forbes.com has reported that Sumitomo Rubber Industries Ltd, Yokohama Rubber Co. and Toyo Tire & Rubber Co. plan to increase prices on their “synthetic-rubber tyres” by four per cent to seven per cent sometime this fall. While none of the companies has made a formal increase announcement, Forbes.com said Japan’s major chemical companies and companies that buy petroleum-based raw material are “scrambling to raise prices of their products” because of fast-rising crude oil prices.
Toyo representative Junko Koide confirmed that the company would increase its prices from the 1 October. The price increases were said to affect passenger car, light truck, and studless truck tyres.
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