Things are tough in China, but not every company is going under. While some are struggling others are expanding quickly. During the course of the recent Reifen China exhibition in Shanghai, Tyres & Accessories spoke with Qingdao Doublestar representatives and found our more about the company’s ambitious plans for rapid change despite the turbulent market conditions.
Reports suggest that struggling Shandong, China-based tyre manufacturing Deruibao tyre has now officially declared bankruptcy. As Tyres & Accessories reported in February, the company called on local Grungrao County officials for support who tried to restructure the business. Qingdao Doublestar and Hengfeng tyre were also linked to the firm as possible buyers.
A couple of months ago we discussed the “restructuring” of relatively large and modern Chinese manufacturer Deruibao Tire. Back then, Qingdao Doublestar was top of the list of firms connected with an acquisition/cooperation/merger rescue orchestrated by the local government. A month later government-owned ChemChina announced that it was buying Pirelli. This latter point has been covered in some depth in the pages of Tyres & Accessories, especially in our April edition. The Pirelli/ChemChina story will no-doubt garner more attention as the very complex outworkings of the deal are walked out, but what remains of interest is the way in which both the local Chinese market and the global industry are engaged in a period of both parallel and inter-connected consolidation.
No sooner had Shandong Deruibao Tire Co., Ltd. entered into apparent “restructuring” proceedings on 7 February then we at Tyres & Accessories started hearing about it on the grapevine (see page 40 for full coverage of this story). Of course, companies face difficulties in any business from time to time, but this case has particular resonance with many because it is emblematic of what is going in China. There are two things the market is interested in – what’s behind the pressures Deruibao are facing and what the knock-on effects will be.
Chinese tyre-maker Shandong Deruibao Tire Co., Ltd. has entered “restructuring” proceedings, according to Chinese news sources. China News reported that on 7 February Deruibao Tire applied to its local authority, the Guangrao Economic Development Zone Management Committee Council, asking for the government to restructure the business – making a sale of the tyre manufacturing operation a distinct possibility.
Shandong Deruibao Tire Co., Ltd., produces passenger car radial tyres under two Chinese brands plus the slightly more anglicized Deruibo international export moniker. Deruibao is currently looking for international distribution partners having embarked on an export programme last March. Initially things began with the export of the firm’s truck and bus radials, but moving forward, the company hopes to do the same with passenger car radials in 2012.
The company currently manufactures 3 million all-steel tyres a year across 100 stock keeping units (SKUs), but the company began building a 24 million unit a year plant a couple of years ago. The firm already produces 13 patterns and 13 sizes of truck and bus radials.
Deruibotire (or Shandong Deribao Tire Co, Ltd), a tyre-maker in Guangrao County, a region of China’s Shandong Province has big new production plans in the offing in 2011. Visiting Brityrex 2010 in Manchester with a Chinese delegation, the company’s president Yuan Tingshu told Tyres & Accessories that, while the company is currently producing 3 million radial tyres per year, it is developing a production line to produce 24 million units in 2011.
Brityrex 2010 attracted a group of visitors from Shandong Province’s Guangrao County, which met with Tyres & Accessories on the Tuesday evening in Manchester’s Renaissance Hotel off Deansgate. The delegation included the president of Deruibotire (also known as Shandong Deribao Tire Co Ltd) Yuan Tingshu; Guangrao Shandong vice county magistrate Li Jianjun; and Bureau of Commerce of Guangrao County director and party secretary Zhu Hanqing. The delegation gave a presentation on the strengths of Guangrao County – a location described by Li as “an economic powerhouse within Shandong Province” and one of China’s major tyre and automotive accessory producing regions, as well as the host of China (Guangrao) International Rubber Tire & Auto Accessory Exhibition (ChinaGRTAE), which is due to be staged for the second time in 2011. Along with Tyres & Accessories and other representatives of the UK tyre trade, the delegation met with the NTDA’s Richard Edy and Peter Gaster, also of UK wholesaler Kings Road Tyres.
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