Russia
Sibur-Russian Tyres (SRT) is a large manufacturer in a large country. As Russia’s largest producer of agricultural tyres, SRT claims to supply 70 per cent of the vast domestic market. But domestic supply is only part of the SRT story. In recent years the volume of OTR tyres exported has also increased to upwards of half a million units, and the company predicts that for 2006 OTR exports will account for 50 per cent of production.
Headquartered in Johnstown, Ohio and founded in 1939, Tech International is a family business that describes itself as the world’s leading producer of tyre and tube repairs and wheel service solutions. According to the official literature, the company markets more than 5,000 products into over 110 countries throughout the world and is recognized as one of the top exporters in the United States.
The history of the Triangle Tyre Co. Ltd goes back three decades, when the Weihai Tire Factory opened a plant in Weihai, Shandong Province, China. In 1997 it changed its name and began trading as Triangle Tyre Co; part of the Triangle Group of companies. Since then the company has grown rapidly and it is now aiming at nothing less than being a top 10 player in the global tyre market.
Triangle is currently one of the top 500 companies in China and employs 6,300 staff. Depending on which criteria you use, Triangle is the 12th, 13th or 14th largest tyre manufacturer in the world – not bad for such a young company. The turnover last year was US$980 million and has risen by 50 per cent in the past three years.
Fresh from the success of pre-selling over 1 million winter tyres by August this year, Deldo has announced plans to further its interaction with the UK market, arranging to meet clients at next May’s Brityrex trade show. Tyres & Accessories contacted Deldo marketing manager, Rutger Veerman, and also learnt that the company and its key Chinese manufacturing partner, South China Tire & Rubber Company Ltd (Guangzhou) is investing in improving product production.
To get an idea of the scale of Deldo’s operation you need only look at the company’s annual turnover. In recent years Deldo have achieved an annual growth rate of approximately 10 per cent. Wanli remains Deldo’s best selling budget product, with a range of 160 (in 2007) passenger, light truck, SUV, 4×4 and truck tyres. Deldo is likely to sell 2 million Wanli products this year.
An investment of about 500 million euros (£340 million) into a new tyre factory is a clear statement of the future direction of a company. Hankook’s decision to invest in Central Europe rather than the US, Korea or China shows what an important role the European market plays in Hankook’s future growth and development strategy. The new factory, which will be built in the Hungarian city of Dunaujvaros, not only provides the company with missing production capacity close to important sales markets and cheap but highly-skilled workforce, but also goes far beyond the obvious, Seung Hwa Suh, president of Hankook’s European headquarters in Germany, says in an interview with Tyres & Accessories. There are three keywords that Mr Suh frequently uses to describe Hankook’s strategy for Europe and the rest of the world: quality/innovation, service and brand awareness.
With six months to go before Brityrex International opens its doors, the exhibition is shaping up nicely, with over 67 per cent of floor space already sold, say the organisers, ECI International. And never before has the “International” part of the show’s name been more appropriate, as companies from all over the world will be making tracks for Manchester’s G-MEX Exhibition Centre next May. ECI International managing director Paul Farrant is delighted with progress to date, saying: “Past Brityrex exhibitions have always had a large number of exhibitors from the UK, and indeed the 2007 show is no exception, but we are seeing an increasing number of overseas companies taking space.”
Some analysts have responded positively to a Nokian’s announcement that it has launched the second stage of its Russian plant. Deutsche Bank reported that the warehouse “raises delivery capacity while the mixing department improves the process and should hence save some cost given that the compounds have been imported from Finland thus far.” The analysts reported that production is on track and progress is in line with previous suggestions that the factory will be able to produce four million tyres in 2008.
The second stage of Nokian Tyres‘ Russian factory, which started operation in June 2005, was launched today (22 November) in Vsevolozhsk. The second stage launch marks the conclusion of construction work on the warehouse and the mixing departments, which started in September 2005.
The 19,000 square metre warehouse can house approximately 600,000 tyres. The start-up and test-run of the first mixing line at the new department was done in September and the second line is being installed. The new mixing department enables the company to produce rubber compounds for tyre production locally in Russia and end deliveries from the Nokia factory in Finland.
Only weeks after it emerged that Continental was discussing a possible purchase of Slovakian tyremaker, Matador Rubber, reports have surfaced that Continental’s eastward movement could now include purchasing the majority stake of Amtel-Vredestein. According to Russia’s Kommersant newspaper, Amtel-Vredestein (AV) managing director Alexei Gurin recently initiated discussions with Continental AG and the company could sell a majority stake to the German company as soon as spring 2007. For its part AV confirmed it has held discussions with Continental “in relation to possible areas of cooperation in Russia.” A Continental spokesman at the company’s Hanover headquarters also confirmed that talks between the two companies had taken place.
Despite reporting net sales of $198 million in the third quarter of 2006 and $548 million (up 19 per cent) in the first nine months, Amtel-Vredestein’s net loss doubled to $22 million between January and September. For the full year, the company projects net sales in excess of $800 million and EBITDA of approximately $100 million in 2006, according to the company. “A net loss of $10-$12 million is expected for the year — primarily as a result of increased investment costs and interest expenses as the company continues its Russian production, distribution and retail expansion programme,” official documents stated.
Publishing its third quarter results Nokian Tyres announced it achieved pre-tax profits 35.8 million more than doubling the previous year’s total of 16.9 million euros. Nokian’s results were well-received by analysts who applauded the company’s consensus beating results. According to Deutsche Bank, Nokian’s EBIT was 6 per cent higher than analysts’ collective projections and 19 per cent above Deutsche’s estimate.
Aufeer Design has signed a strategic alliance with Matador Automotive corporation. The agreement was strengthened by Matador Automotive’s acquisition of one third of the Aufeers’s privately held shares. Matador, one of the Slovakia’s biggest corporations, says that is has the primary objective if supporting Aufeer Design activities‘ growth and expansion in Czech, Slovak and international automotive markets, including those involving more than 30 joint-venture companies which it currently owns in the automotive segment.
On the Helsinki Stock Exchange, Nokian Tyres’ shares fell slightly to 15.35 euros after the company was downgraded by analysts Morgan Stanley from “overweight” to “equal weight”. Nokian’s valuation has outperformed others in the market since July, says Morgan Stanley, but is now starting to appear stretched. Another factor is the possibility of increased competition in Russia, following reports that Bridgestone has acquired land in St. Petersburg.
Sibur-Russian Tires, Russia’s largest tyre holding company, has announced that it will build a steel radial tyre plant capable of producing 1 million tyres a year by 2010. The project is set to be approved in the second half of 2007. According to analysts at Russia’s Centre Invest, construction will begin in 2008. The new facility is likely to be registered as a wholly owned Sibur-Russian Tires subsidiary. Sibur Holding president Alexander Dyukov had earlier told Vedomosti that similar arrangements would be used to upgrade other subsidiaries.
Sibur Russian Tyres Holding (SRT) has launched the first all-steel truck radial tyre made in Russia. Tubeless truck radials (branded TyRex) were recently produced at one of the company’s tyre plants and are reportedly fitted to MAN, Volvo, Scania, MAZ, KamAZ vehicles. Sibur is planning to reach 370,000 units per year in all-steel truck tyre production. About 30 per cent will be exported. There are already said to be potential clients among leading distributors in Eastern and Western Europe. Increasing demand is expected from the Middle East and Northern Africa.
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