Borbet in South Africa
Murray & Roberts has sold 50% of the business of AWI South Africa to Borbet GmbH of Germany, with effect from 1 July 2003 and subject to approval by the competition authorities.
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Trelleborg Wheel Systems – First Half Year Results
Product NewsFigures show that Trelleborg Wheel Systems achieved sales for the first half of the year of 1,470 million Swedish Kroner (SEK), or 160.2 million Euro. Operating profit was up 33 per cent to SEK 84 million (9.15 m Euro), compared with last year’s first half figure of SEK 63 million (6.87 m Euro). During the second quarter, turnover was SEK 713 million (77.7 m Euro) and operating profit was SEK 39 million (4.25 m Euro).
Waste Tyres – The South African Solution?
Product NewsSouth Africa has an estimated stockpile of 800 million waste tyres; a considerable achievement for a country that produces only 12 million tyres per annum. Currently most of these tyres are either burned, or retreaded. The former releasing styrene and butadiene, both known human carcinogens, into the atmosphere along with thick black smoke and other chemicals. The South African government recognises that this is not a satisfactory response to the growing problem and is intending to make it mandatory that tyre manufacturers recycle their rubber products. The recycling initiative is estimated to be about to create some 800 jobs in recycling and collection. With only one recycling plant in the country there is a shortage of recycling facilities and the government is in discussions with various companies with a view to establishing further recycling plants. One of the key end products is the use of tyre rubber in asphalt. One of the problems for any investor in recycling in South Africa is the lower volumes experienced in the business compared to Europe or the USA. These lower volumes push up costs and make the already marginal operations less cost effective still. The government’s aim is to drive the tyre manufacturers to provide the recycling facilities, one way or another, and to ensure proper disposal of their products. The government will impose a one per cent tariff on the sale of every tyre, this will be used to fund the collection and disposal through The South African Tyre Recycling Process Company, a non-profit organisation that will collect waste tyres and deliver them to recycling points.
Yokohama South Africa Cuts Tyre Prices
Product NewsIn South Africa, Yokohama is drastically cutting prices of passenger car tyres, by up to 26 per cent. The company says that this is because the Rand has strengthened against other currencies and is challenging competitors to reduce prices also. Yokohama has an estimated 2 per cent share of the South African market.
Continental Sales And Earnings Rise In 1Q
Product NewsContinental has turned in a good performance in the first quarter, despite a sluggish automotive sector market. Sales rose 3.2 per cent over 1Q 2002 to 2.82 billion Euros (2.73 bn). If these are adjusted for currency fluctuations, the increase was 9.7 per cent. Net profit was up 28 per cent to 87 million Euros, giving a margin of 6.5 per cent. Passenger tyre revenue was up, as were sales at Continental Automotive Systems and ContiTech, but turnover on truck tyres was down.
Maxiprest Issue Warning
Product NewsMotor tyre group Bridgestone/Firestone Maxiprest (South Africa) announced last Friday that its expected full-year earnings would not be achieved, due to pressure on margins and the effect of the stronger rand on its export trading operations. The group said it was however confident that the areas of concern are being addressed and that the group “will continue to show earnings growth”. It also said its board had decided to make provision for the “non-recoverability of a debt due by an associate company in which the group has a 40 percent equity stake”. It releases its annual results in mid-February. The group’s shares were unaffected by the release of the trading update, trading four cents higher at 1.84 rand by close on Friday, from 1.80 rand on Thursday.
Goodyear Sells SA Distributor
Product NewsIntertyre, Goodyear’s South African distribution operation has been taken over by African Genesis, a wholly black-owned investment company. African Genesis has taken 70 per cent of Intertyre leaving Goodyear with the remaining 30 per cent. Currently Goodyear has 40 per cent market share in South Africa and the change in management of Intertyre is planned to increase the company’s performance. Intertyre CEO Lawrence Mavundla, who is also the national president of the African Chamber of Hawkers and Informal Business, said yesterday that the deal presented an opportunity for small business to set up mini distribution enterprises in the tyre industry. He said the partnership would bring about a “robust growth” in Goodyear’s market share, mainly in the passenger vehicle market. ”There are some chamber members who trade in tyres. However, the tyres they sell mostly don’t meet the SA Bureau of Standards’ requirements,” he said. Mavundla said while some of these small enterprises import tyres illegally, the situation was worsened by some traders who used glue to retread tyres, making them unsafe. Intertyre hopes to address these problems by making tyres available at reasonable prices to Chamber members. It is also hoped that this will initiate strategic alliances with Goodyear subsidiaries and create a platform for generating other larger projects in South Africa and neighbouring countries.
$20 Million Investment In Zimbabwe Bandag Plant
Product NewsNational Tyre Services Limited (Zimbabwe) has invested $20 million on the commissioning of a third curing chamber at its Harare Bandag factory. The investment comes at a time when other companies are closing shops or relocating to other countries. NTS Zimbabwe is an official re-distributor of Dunlop tyres and is now the largest customer in southern Africa for Bandag products.
Goodyear 3Q Results: Net Income Triples
Product NewsGoodyear has published its results for the third quarter. Net income more than tripled to $33.7 million (3Q 2001: $9.3 m), while worldwide sales were down slightly at $3.5 bn ($3.7 bn). Currency movements had an estimated $4 m negative effect on sales and $10 m on earnings. For the first nine months, Goodyear posted a loss of $0.6 million, compared with a loss of $29.6 m for the same period last year. Sales were down too, at $10.3 bn ($10.7 bn), while tyre volumes slipped 2.5 per cent to 160.7 million units. Sam Gibara said that economic conditions in key markets and rising raw material costs are a concern, but Goodyear will continue to concentrate on reducing working capital.
Investor Update From Goodyear
Product NewsIn 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.
Tiger Wheels Grow
Product NewsSouth African Tiger Wheels has benefited from a weak Rand pushing attributable earnings up by 63.3 per cent for the year to June. Revenue was up by 22 per cent and earnings by 49 per cent. According to the company the average euro-to-rand rate of R8.95 had most benefited the German-based division, ATS which became one of the main drivers for the growth in revenue. The company reported an improvement in production at its Babelegi plant in South Africa, increased production from the new Polish facility and the first phase of a new US wheel manufacturing facility at Auburn, Alabama was now under way. The US expansion has come about to meet the demand for wheel rims from DaimlerChrysler.
South African Waste Tyre Legislation Delay
LegislationSouth Africa produces 90,000 tonnes of waste tyres per year and currently only recycles 10 per cent. The country has one large tyre recycling company and some 10 smaller operations, with another 16 waiting to develop business when waste tyre legislation is developed. However, a white paper on waste expected in July has not yet been issued and the SA Tyre Recycling Process Company (a not-for-profit organisation hoping to establish itself as the governing body for the industry) reports that some landfill sites are already refusing to take tyres and others are charging up to 15 Rand (1,40 €) per tyre. The company suggests a collection fee, payable by the consumer, of 6 Rand (0,60 €), which will fund the recycling process collection and management. The subsidy is needed, say the company, because recycling operations need to receive the tyres at virtually no cost to be profitable.
Two Records For Dunlop South Africa
Product NewsIn South Africa, a V8 speedster called Spirit of Dunlop, shod with locally-produced SP Sport 7000D tyres, achieved an average speed of 388.538 km/hr over a measures kilometre, monitored by Motorsport SA. This is an unofficial, but recognised, World Land Speed Record for standard production tyres, says Dunlop Tyres South Africa. It also beats the South African Land Speed Record of 372.401 km/hr, which has stood since 1990. The Spirit of Dunlop was driven by three times SA Production Car Champion Grant van Schalkwyk.
Tripling Investment In South Africa
Product NewsBridgestone/Firestone is to triple its investment in South Africa to around 15 million US dollars. Chairman Takashi Wada states that this is part of a drive to build market share and improve exports. There are expectations of increased OE business with Ford, GM, Toyota and BMW. The aim is to make the South African operation the third largest in the Bridgestone portfolio.
Dunlop Divests In South Africa
Product NewsDunlop Tyres International (formerly Dunlop Africa) has sold off its international products division to Specialised Belting. The price was not revealed. The international products division includes conveyor belt and hose manufacturing and the sale, according to Dunlop CEO Mike Hankinson, follows Dunlop’s decision to concentrate on the core business of tyre manufacturing
