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Michelin Plant to Open

Michelin & Cie., one of Europe’s largest tyre makers, is set to open a tyre plant in Russia on 7 July. Both Interfax and The Moscow Times reported the information, citing an official at the company’s press service in Paris, who stated that the plant, based in the Moscow region, will produce 2 million car tyres a year. The company intends to expand this capacity to 6.5 million next year. The press service source said Michelin is investing $160 million in the plant.
Michelin, based in Clermont-Ferrand, France, planned to borrow $20 million from the European Bank for Reconstruction and Development for the Russian factory two years ago, on the understanding that the EBRD had would have a 49 per cent stake in the plant.

25th June 2004/by Tyrepress Editors

Tires & Rubber 2005

The 8th Moscow international specialised exhibition for the tyre and rubber industry will take place at the Expocentre, Moscow from the 1st to the 4th of February 2005. With analysts predicting an annual growth rate of between 15 and 20 percent over the next 4 years the Russian tyre market presents fertile ground for investment and commercial evelopment. This show serves as a shop window and offers a meeting forum for Russian and international companies.

For further information contact:
Alla Shevchenko
Maxima International Exhibitions
Office 219
3, Profsoyuznaya Street
Moscow 117036
Russia
Tel: +7 095 1247760
Fax: +7 095 1247060
Email: shevchenko@maxima-expo.ru
Web: www.maxima-expo.ru

15th June 2004/by Tyrepress Editors

High Performance Tyres: the great white hope …

The global tyre market may be dominated by a handful of large players, with a number of “second row” players, followed by the rest of the world. The gap between the primary three and the fourth and fifth place manufacturers is considerable, and between the fourth and fifth and the rest of the market there is a considerable gap. However, the impact of the rest of the world on the market conditions enjoyed by the top five players is quite considerable. Tyre quality used to be such that there was a clear and distinct difference between the market leading brands of Michelin, Bridgestone, Goodyear, Pirelli and Continental, (and we must include Cooper here) and those of any of the other manufacturers. The reality though has been changing and increasingly brands from smaller manufacturers such as Toyo, Yokohama, Hankook, Kumho and latterly Federal have been increasing their market share by improving the quality of their products and building their brand image – often in the high performance sector.

Today, the market dominance of the key players is under pressure. Profitability is being eroded across tyre ranges by the increasing availability of low cost budget tyre brands. The commodity tyre requires no brand loyalty and sells on price alone. Thus, the high volume market necessarily targeted by the budget tyre manufacturers has largely become their domain. It has in essence been abandoned by the big brands. Yes, if you need a 155/13 from Michelin, or Goodyear you can still get it, but increasingly that tyre is being manufactured in a low labour cost centre in a joint venture with another tyre manufacturer who is also feeding his own budget tyres into the same market at a fraction of the price of the main brand names. If a big player is using a JV, or an offtake agreement in the Far East to fill commodity demands, he has surely all but abandoned that market. Indeed, if there is so little margin left in commodity tyres, if it were not for market shares, corporate egos, overall economies of scale and public relations where is the logic in continuing to offer branded commodity tyres?

The “great white hope” for the leading players, who have lost margins to the budget brands, is to develop a technologically advanced premium sector where quality and premium branding help create an exclusive market offering higher margins to the manufacturer, the wholesaler and the retailer. The high performance market offers just such an opportunity and the leading manufacturers are concentrating their efforts on the UHP sector in spades. Every new tyre launch is about UHP. Summer tyres, SUV tyres, winter tyres, all have an emphasis on the UHP market. Repeatedly the message is that the sector is growing in Western Europe and that it is destined to expand rapidly when Central and Eastern Europe follows the Western trend. However, it is not just a trend in Europe; it also follows in the USA – though perhaps surprisingly performance tyres account for only 13 per cent of the US market, whilst they amount to some 54 per cent of the European market according to Michelin; in Russia as an emerging market and in the Indian sub-continent – long ignored by the main brands as too poor an economy or too competitive a market. Here too the main brands are setting up camp and preparing to take market share from the domestic producers with high performance tyres. Pirelli being one of the first to see the potential and react with an improved sales operation.

21st May 2004/by Tyrepress Editors

Nokian 1Q Sales Increase

Nokian Tyres has released its 1Q figures, which show a 17.8 per cent increase in sales over 1Q 03, from 95.7 million Euros to 112.7 million Euros. Group operating profit was up to 10.7 million Euros (3.2 million). Profit before taxes was 9.6 million Euros (1.6 million) and net profit totalled 6.5 million Euros (0.7 million). Sales of passenger car, heavy tyres and retreading materials rose, but bicycle tyre sales fell.

5th May 2004/by Tyrepress Editors

Bridgestone not talking with Amtel

Shigeo Watanabe, head of Bridgestone Corp., has categorically stated that the company was not discussing a production deal with Russia’s Amtel, which has threatened to dump partner Nokian Renkaat. Russian tyre maker Amtel told Reuters last week that relations between it and Finland’s Nokian were frozen and their venture could end. Nokian, in which Bridgestone owns about 20 per cent, has said its 50-50 joint venture with Amtel was still intact. Amtel Vice President Anatoly Volnov, however, has stated Amtel and Bridgestone plan to produce a quarter of a million tyres this year under the Bridgestone brand at the Kirov plant.

20th February 2004/by Tyrepress Editors

Nokian Tyres plc Q4 improvement

The Nokian Group’s net sales and operating profit increased in Q4 with all profit centres improving their results. Net sales grew by 10.3 per cent, to 528.7 million Euro (2002: 479.2 million Euro). Operating profit was 79.1 million Euro ( 60.1 million Euro). EPS were up to 4.48 Euro ( 3.17 Euro). The Board of Directors propose a dividend equalling 35 per cent of the net profit, that is 1.56 Euro ( 1.11 Euro) per share, to be distributed.

12th February 2004/by Tyrepress Editors

Bridgestone raises tyre prices

Bridgestone Corporation has announced that it has begun raising tyre prices by around 5 per cent in Asia, Oceania, the Middle East, Africa and Russia to offset the rising cost of natural rubber and other raw materials. The price increases vary by product and by market and largely apply to radial and bias tyres for passenger cars, light trucks, trucks and buses sold under the Bridgestone and Firestone brands.

21st January 2004/by Tyrepress Editors

Nokian plant in Russia

Nokian Tyres will start construction of a 120 million US Dollar tyre plant worth in the Leningrad Oblast in 2004. The plant, due to be completed in 2005, will be built in three stages and eventually reach capacity of 6 million tyres per year. Nokian holds about 14 per cent of the imported tyre market in Russia.

15th January 2004/by Tyrepress Editors

New Drivers at Matador

Since T&A last visited Matador there have been a few changes in the management team. These have been brought about by the retiring of company patriarch, Stefan Rosina Snr. There can be little doubt that Stefan Rosina Snr. is not only a sound businessman, but also an astute politician; if he were otherwise he would not have been able to guide Matador into the free market as he did. The many years involved in the business have placed Mr. Rosina in a commanding position to help develop Matador’s relations both with the Slovak government, of whichever hue, and with politicians and businessmen in the new markets of Russia and the former Soviet influenced states. Although no longer at the helm of Matador, Stefan Rosina Snr, still plays a major figurehead role both as a consultant and as a powerful lobbying tool for Matador.He has been replaced as president of Matador by his son, Stefan Rosina Jnr. as President and Chairman of the Board of Directors. Mr Rosina Jnr. told T&A that the company aims to remain fully independent although working towards new projects with joint venture partners in growing markets. Mr. Rosina reported ongoing developments in Russia at Omskshina, where the JV was now producing 1.5 million tyres per annum and selling every single piece on the Russian domestic market where the Matador brand had already developed a strong following of loyal and satisfied customers. Two other joint ventures in Russia were still under development. Much there depended upon final negotiations and Due Diligence work before any official announcements could be made. However, a JV with Addis Tyre in Ethiopia was in the course of being finalised as we spoke. “This is a long term investment, we will build gently in Africa through our Ethiopian partners. We have long term plans to develop the region, create jobs and wealth and provide education. In Matador, wherever we are we see the potential to provide good employment prospects through the generations. My father worked for Matador, Miroslav (brother) and myself work for Matador and our children also have started working for Matador. We see that same opportunity for all our employees families.”The direction of the company may not have altered but the structure of the upper management has. Stefan Rosina Jnr is the President and Chairman, he is supported by Miroslav Rosina as Vice Chairman and Director of International Operations. The top layer of management is completed by Jozef Vozar, vice president for strategy and General Director Štefan Prekop.

8th July 2003/by Tyrepress Editors

Nokian Buys Russian Retreader

Nokian has purchased the Eurobandag retreading plant, situated in St. Petersburg, Russia. Last year, net sales at the plant totalled 0.5 million Euros and the factory retreaded 2,000 truck tyres. Nokian is also re-arranging its retreading materials operations, bringing together the personnel employed at its Vianor retreading plants in Finland, Sweden and Norway under one profit centre.

13th June 2003/by Tyrepress Editors

Sales And Profits Rise For Nokian

Good 4Q sales have helped Nokian to increase turnover and profits for last year. Sales rose 13.2 per cent to 479.2 million Euros (2001: 423.4 m). Operating profit was up at 60.1 million Euros (2001: 50.1 m) and profit before taxes rose 29.5 per cent to 48 million Euros (2001: 37 m). Sales from car tyres were up 17.5 per cent to 242.8 million Euros (2001: 206.6 m) and operating profit rose 10 million to 51.4 million Euros. Much of the tyre sales (73 per cent) came from winter tyres. There were increases too in sales of heavy tyres and bicycle tyres, but sales of retreading materials slipped slightly. The Vianor chain also showed an increase in turnover and profit.

19th February 2003/by Tyrepress Editors

Nokian And Amtel Sign Joint Venture Agreement

Nokian and Russian company Amtel Holdings have formally signed the joint venture agreement to produce and sell passenger and light truck tyres in Russia and CIS countries under the Nordman and Amtel brands. 900,000 tyres will be produced next year and 3,600,000 the year after. Upgrades of Amtel factories will require investments of US$ 25 million and the two partners intend to build a greenfield factory in Russia to produce premium tyres under the Nokian brand. The target is an annual production of 1.2 million tyres within three years of the start of the project.

30th December 2002/by Tyrepress Editors

Investor Update From Goodyear

In August, North American industry shipments of consumer replacement tires were 8 percent below last year’s levels. Goodyear’s shipments of consumer replacement tires were also down and below the industry shipment levels. However, Goodyear’s shipments to its large wholesalers continued to improve in August. Shipments of custom brand tires declined significantly from August 2001 levels. Commercial replacement tires were up 18 percent from last year’s levels. Goodyear’s shipments of commercial replacement tires increased but were below industry shipment levels.European Union industry replacement tire shipments were down 1 percent for consumer tires and down 6 percent for commercial tires compared with prior year levels. Goodyear consumer tire shipments declined at the same rate as the industry and Goodyear commercial shipments were below industry shipments. In Eastern Europe consumer replacement tire unit sales for Goodyear were up significantly compared with August of last year. Volume gains were reported in most countries, especially Russia and South Africa. The Latin American market showed August replacement tire shipments were up primarily due to higher consumer sales in Mexico and Venezuela and strong commercial sales in Brazil whilst OE shipments were down significantly from last year due to a decrease in auto production in Mexico and Brazil. In Asia replacement tire shipments increased throughout the region in August whilst OE tire shipments declined from 2001 levels due to lower sales in China and the ASEAN region.

19th September 2002/by Tyrepress Editors

Turnover And Profits Up For Nokian

Nokian Tyres has released its figures for the second quarter. Looking at the figures for the first six months, both turnover and operating profit were up on 1H 2001. Turnover rose 12.6 per cent to 193.3 million Euros (1H 2001 171.6 m Euros) and operating profit was 8.7 m Euros (6.7 m). Net profit was 1 m Euros (-0.8 m Euros). The good figures were the result of price increases, improved product mix and lower material costs. Most product groups showed increased sales, with the exception of retreading materials, and the Vianor retail chain lost 2.5 m Euros.

12th August 2002/by Tyrepress Editors

Good First Half Results For Michelin – “Challenging” Next Six Months Forecast

Michelin has released its first half figures. Compared with 1H 2001, turnover is up 1.4 per cent to 7.8 billion Euros and operating profits up 16 per cent to 569.6 million Euros. Net profits were down 31.2 per cent to 254.1 million Euros, but the figures for 1H 2001 included a sale of Peugeot shares; when these are factored out of the equation, net profits for 1H 2002 rose 279 per cent. Much of the credit for the results goes to Michelin’s restructuring programme and debt has been reduced by one billion Euros, with operating margins improving one point to 7.3 per cent of net sales. Raw material costs declined by 6 per cent over the period. Looking ahead, Finance Director Michel Rollier described the second half of the year as “challenging and uncertain”, particularly the economic crises in South America. Michelin’s shares rose nearly 4 per cent on publication of the results.

31st July 2002/by Tyrepress Editors