Europe received its first shipment of tyres from Sri Lanka’s Laugfs Rubber Corporation in early September. The European market thus joins the company’s growing international network, which includes a holding company in Hong Kong and distribution centres in North America, Canada, Australia and the Middle East.
Sri Lanka’s only representative at Reifen 2008, Global Rubber Industries took the opportunity to display their range of solid tyres – branded The Performer – in Hall 3, Booth 327. The island nation is the world’s largest producer of solid rubber tyres, supplying 60% of the global need, and Global Rubber is the dominant manufacturer.
Reporting a successful show this year, the company is already making plans for the next Reifen in 2010, where they say they will be pursuing opportunities to increase their EU market share by exhibiting their premium line of Solid Tyres at the 2010 show. GlobeStar is so far established in 25 countries.
Sri Lanka-based manufacturer Kelani Tyres PLC has recently witnessed its share price jump up 30 per cent. Speaking to local newspapers Managing Director Rohan Fernando said apart from the company’s strong performance in the last quarter, he is “unaware of any reason” for this. for share prices to increase except for the high performance of the company in the last quarter. However, he did concede that the stock jump was “an unusual increase in the price of shares traded.”
Sri Lanka has been named as the location for the Birla Group’s new carbon black facility. The company, one of India’s largest corporations, looks likely to invest RS 4.8 billion (US$120 million) in the plant, which will be located in the country’s south, within the Koggala Export Processing Zone.
“The matter has been under discussions since last year. Aditya Birla Group is likely to go ahead with its proposed $120 million investment on the carbon black plant in Koggala Export Processing Zone, in southern Sri Lanka,” an official was quoted as saying. In a statement Birla said it expects to be granted the clearance to proceed subsequent to a recent meeting between Sri Lankan Minister for Enterprise Development and Investment Promotion Sarath Amunugama and senior Birla Group executives.
The Sri Lanka Transport Board (SLTB) has announced it will establish two new tyre manufacturing facilities to provide the 14,000 tyres needed for its buses every month while its Ampara tyre factory is being refurbished. The new plants will be located in Matale and Ekala, and SLTB expects to manufacture between 10,000 and 12,000 tyres annually when the first stage of work is complete.
The SLTB’s decision to produce its own tyres rather than import them is perhaps best understood by looking at Sri Lanka’s customs regulations. The SLTB spends Rs 65 million (£308,000) per year on tyre purchases, and each tyre brought into Sri Lanka from overseas is now subject to a tax of Rs 80 (£0.37) per kilogram or 28 per cent of the tyre’s invoiced value, whichever is higher. Assuming a weight of 70 kilograms per tyre, tyre tax, were all tyres to be sourced from overseas, would amount to £62,000. This equates to 20 per cent of total cost.
Trelleborg is reported to be expanding its operations in Sri Lanka at the expense of those in the US. The Ceylon Daily News reports that the Swedish firm intends to invest US$20 million expanding its operations in this South Asian nation, with part of this expansion taking the form of relocating its entire Hartville, Ohio tyre operations there.
Laugfs Gas Holdings will reportedly invest 800 million rupees (£10.4 million) to enter the international pneumatic tyre market in 2008. The first product in the Sri Lanka-based company’s pneumatic tyre portfolio was a Laugfs Colt, a 4.00×8 small pneumatic tyre with flexible sidewalls designed and manufactured for three-wheelers. “This has proved to be a major success and we command a high market share,” Laugfs chairman and managing director W. A. Wegapitiya was quoted as saying.
The island state of Sri Lanka, long one of the world’s major rubber producers, also holds the distinction of being the world’s largest producer and exporter of solid tyres. This sizable industry is one that Laugfs Corporation Rubber, a subsidiary of Sri Lanka’s Laugfs Holdings, intends to enjoy a share of, and the company thus is investing in a new facility for the production of solid tyres.
A 2.43 hectare site for the new operation has been owned by the company for two years, reports CEO Ananda Hadunge. The installation of equipment is expected to begin in early November, with the facility ready for commercial production in the first part of 2008. Hadunge adds that the facility will initially produce 12 tonnes of tyres per day, with this capacity increasing to 25 tonnes within six months.
Export markets have been viewed as a priority from the onset, and the CEO apparently has his eye on the USA, Canada and Western Europe as key target markets for the new plant’s products. According to Hadunge, Laugfs Holdings is reportedly also planning to invest in a solid tyre production facility in Australia that will produce tyres for industrial and construction vehicles. The CEO did not elaborate further regarding this project, however.
In 2006 Summit celebrated 20 years in business at Coventry. And after two decades the company is continuing to expand, with 2007 marking the opening of another depot in East Anglia. This new facility is expected to further improve the level of service Summit provides customers in the region.
Summit was founded in 1986 by Peter Summers, a man who had already spent the majority of his career in the tyre industry. Seeking a location at the heart of the country, Summers selected Coventry as the site for his new firm. The business specialised in industrial tyres and wheels to the fork truck and skid steer replacement and original equipment markets. Operating in a niche market, Summit quickly established itself as a leader in its field for product and advice in this specialist area. Furthermore, Summit ensured that it held stock of products that other wholesalers and distributors didn’t, thus building a reputation that is still enjoyed today – if the tyre or application is unusual, the likelihood is that Summit has got it.
Laugfs Holdings, the Sri Lanka based LPG company that has diversified into many areas of business, ranging from rubber products to restaurants, bottled water and apartments, is planning to invest Rs 350 million (£1.58 million) during the next three months at their tyre manufacturing facility in Millewa, in the country’s Western Province.
“We will start making solid tyres used for forklifts and other heavy machinery,” said Laugfs managing director Thilak de Silva. He added that the products are primarily destined for export to Australia and South Africa. “We have got orders from these countries, from companies which engage in mining.”
Prior to this latest investment Laugfs’ tyre manufacturing focused upon pneumatic tyres for three-wheeled vehicles and tyres for wheelbarrows. The company reports it is also in the process of developing a range for motorcycles and passenger cars under its ‘Palomino’ and ‘Stallion’ brand names.
The bicycle tyre manufacturing facility in the Sri Lankan town of Mawanella operated by the Sri Lanka Rubber Manufacturing and Export Corporation, a body owned and controlled by the nation’s Ministry of Plantation Industries, has ended production and remains closed. Local media reports indicate that plant machinery is in a state of decline and the factory buildings have become ‘dilapidated.’
The plant was established in 1974 under a United Nations Development programme at a cost of £17 million. However the machinery in use was said to be sub-standard, resulting in the poor performance of the company’s tyres in the marketplace.
(Akron/Tire Review – The International News (Sri Lanka) One of the world’s biggest solid tyremakers is trying to double its turnover and turn Sri Lanka into a key exporter of rubber products.Raw rubber has been the country’s second largest export commodity after tea, but a Belgian-Sri Lanka joint venture is trying to re-invent the way wheels are made and make the island a global hub for tyres.
Solideal Loadstar is one of Sri Lanka’s best-kept secrets and its biggest exporter, accounting for just over two per cent of the nation’s near seven billion dollar export earnings. “In the world market, we now control 20 per cent in the solid tyre and about five per cent in the industrial tyre markets,” chairman Nihal Jinasena told AFP.
“Any fool can make a tyre,” said Jinasena, whose family controls 40 per cent of Solideal Loadstar. “What is difficult is to keep innovating, penetrate markets worldwide and to support your sales.”
A recent Government move to end revenue losses amounting to several billions of rupees as a result of under-invoicing by some unscrupulous importers of tyres, has been welcomed by local industry and legitimate importers, the Sri Lanka Daily News reported. Effective from 15 May 15, importers of tyres are required to pay a tyre weight based duty of 80 rupees per kg or 28 per cent of invoiced value, whichever is higher. Previously, duty was computed at 28 per cent of value only. Local manufacturers also see the system as fairer. Such businesses have experienced hikes of 72 per cent in fuel prices since April 2006, and a 25 per cent increase in electricity costs.
Trelleborg has taken steps to consolidate its industrial tyre production capacity, moving production from North America to Sri Lanka. Trelleborg reports that it has plans to invest in increased production capacity at one of Trelleborg Wheel Systems’ plants in Sri Lanka. As a consequence of this, the production of industrial tyres will be terminated and relocated from Trelleborg Wheel Systems’ plant in Hartville, Ohio, in the US. The cost of closure, production transfer and investments will total approximately 130 million Swedish krone (£9.7 million) over a three-year period.
For Sri Lankan tyre manufacturer Solideal, 2006 is proving to be an important year for its growth in the UK. After two record sales years the company has invested in a new warehouse facility in the heart of the UK. Located in Stafford, the 57,000 square foot facility is perfectly positioned to meet the distribution demands of its customers.
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