Sime Darby Bhd has reported a 17% rise in net profit to RM 214.1mil for its first quarter ended Sept 30. “We are quite pleased with the results and if this trend continues, we can beat last year’s performance,” said Sime Darby group chief executive Tan Sri Nik Mohamed Yaacob. Its tyre manufacturing division saw improved profits thanks to production efficiencies and a rise in turnover.
KoSa is investing in the expansion of two of its tyre cord facilities; at Queretaro (Mexico) and Charlotte (North Carolina). Output at Queretaro will increase by 40 per cent, while the investment at Salisbury will mean higher quality product for packages.
T&A looks at the recent history of retreading, the threats and the opportunities. According to RAPRA, the number of tyres generated in the UK that would be suitable for retreading is around 15 per cent of car tyres and 50-70 per cent of truck tyres. However, it is reported that only nine per cent of car tyres are retreaded and as few as 24 per cent of truck tyres. It should be noted that many customer own tyre contracts include retreaded tyres which do not get included in this figure and these may amount to as many as 35% of the total retread truck tyre volume in the UK. In 1994 an estimated 14 per cent of the UK car tyre replacement market was taken by the retread sector. This dropped to 12 per cent by 1998 (something around 16 million tyres) and collapsed to eight per cent in 1999 and is continuing to fall. This is a far cry from the 20 per cent market share held in the 1970s and 1980s (when, ironically, the quality was perhaps not quite so good as it is today). Figures for the tonnage retreaded show an increase between 1999 and 2000 from 76,000 tonnes to 77,000 tonnes. Truck retreading is not a particular problem, though there are shortages of casings in some sizes, particularly older more popular retread sizes. The truck tyre market is looking at the cost per kilometre, and retreading lowers the cost per kilometre and makes tyre use much more cost effective. The truck operator sees retreads as a tool to lower running costs.
If everything in life went according to plan or the way it was once written down in the corporate strategy books, then the production of agricultural tyres would have been abandoned long ago. Already way back when Messrs. Haverbeck and Borgmann were board members, there were such angry arguments about the distribution of costs that closing down production looked to be a foregone conclusion. Eventually, however, they changed their minds and production of agricultural tyres continued, even though there was next to no money to be made from it. Closing down production would have cost the corporation even more and so it opted for the lesser evil, but for the company’s dedicated agricultural tyres there was virtually no scope for future growth. And yet in this new millennium the German corporation is one of the few truly serious suppliers in this highly specialised field. In an interview with NEUE REIFENZEITUNG in August 2002 in Otrokovice, Werner Flebbe, head of the agricultural tyre sector at Continental AG, and Thorsten Bublitz, head of corporate marketing and distribution of agricultural tyres, admitted that up until 1995 the company did not exactly cover itself with glory – and yet, in the same breath they were able to add that the largest and most modern agricultural tyres demanded by the industry are now built in the Czech Republic. And the price ratios are now ‘OK’. What is more important, according to Werner Flebbe, is that the major Original Equipment suppliers are now strongly interested in co-operating with Continental.
The National Tyre Distributors Association has formally endorsed the new Tyre World event, scheduled for October 2003 in Earl’s Court, London. Buzz Carter, of organisers IDEX Media, said that London had been chosen after extensive research showed that it was the preference of domestic and international visitors. Tyre World will include a programme of seminars and associated events, including the NTDA’s annual conference Intyreactive and the national “Tyre Technician of the Year” competition. Further details are expected soon.
It has been a good year for Pirelli-shod cars involved in rallying. In the recent Rally Great Britain, Petter Solberg notched up his first World Rally Championship win, with Pirelli taking the first six places. Solberg claimed 2nd place in the 2002 Driver’s Championship, ahead of Ford/Pirelli drivers Carlos Sainz and Colin McRae. In the USA, Pirelli-sponsored drivers scored a 1-2-3 in the SCCA ProRally series driver’s championship and a 1-2 in Group N. Success too in the Pirelli British Rally Championship, with a Pirelli 1-2 in Group N and first and third in the overall driver’s championship. Other successes: 2-3 in the Super Driver’s Championship and first places in the Toshiba Irish Tarmac Championship and the New Pig Scottish Championship. In Australia, Pirelli-shod cars were 1-2 in the Kumho ANCRO (Asia-Pacific) Championship.
Wheel balancing is much more than sticking a lead weight on a wheel – increasingly, people do not want their nice, expensive alloy wheels defaced with a lump of metal, so new programmes have to be introduced to make sure that the weights are hidden, yet safely attached. And the weights differ too, depending on the car model and wheel type. Then there’s the “ban lead weights” argument – all in all there’s more to balancing than appears at first sight.
Dunlop Aircraft Tyres Limited (DATL) has appointed Stuart Smith as chief operating officer. Smith assumes responsibility for all the operations of the company and reports to Rene Charvillat, chief executive officer and chairman. Smith takes over from Andrew Milner who has resigned from his position as managing director of DATL for personal reasons. Milner had successfully managed DATL since 1995 and now wishes to undertake a new challenge. Stuart Smith has thirty five years’ experience in aerospace and previously held senior management positions in the wheel, brake, tyre, brake control and anti-skid sector.
Retreading appears to generate a dichotomy for U.K Government’s environmental “sustainability programme”. On the one hand, retreading a tyre obviously makes better use of the original materials and extends the life of the new tyre, thus creating a lesser demand on fossil fuels and an ultimately finite supply of some raw materials. On the other hand, like any other consumer product, a retread will still end up needing recycling at some time in its life; some call this deferred disposal, but it seems that not all the environmental lobbyists have recognised the fact that recycling only ever delays the ultimate disposal; it can rarely, if ever, offer a final solution but still plays a vital role in resource management. In the UK we already have a very high percentage of recovery and re-use of tyres, including a significant contribution from retreading. Gary Oliver, Chairman of the RMA Marketing and Communication Committee, explains further why he believes retreads are industry’s leading sustainable option. “The retreaders’ case goes something like this. If the market uses 200,000 tonnes of new tyres per annum, then over five years there will be a demand for 1,000,000 tonnes of new tyres. If 50% of those tyres are retreaded every year, then the demand for new tyres falls to 600,000 tonnes over five years, whilst retreading accounts for the other 400,000 tonnes. The fundamentals to sustainable development are thereby catered for; that waste is minimised from 1,000,000 tonnes to just 600,000 tonnes and scarce natural resources are conserved. The maths are simplistic, of course, but if the primary objective of best environmental practice is to minimise use of raw materials, retreading does this whilst also meeting the second best objective of re-use. It is non-sensical that in its recent Producer Responsibility paper the DTI – with the Environment Agency in support – took retreading out of the reprocessing calculations for waste tyres ignoring a real and positive contribution to sustainable practice and effective waste management. By taking us out of the picture simply because we do not fit the way they wish to work and measure their environment performance indicators, we are effectively excluded from any of the economic considerations and unable to contribute towards waste recovery.”
It was in mid-2001 that we reported on the plans of Continental Tyre group to drastically re-organise its commercial tyre operations in the UK. How successful was it? The result was no cosmetic tinkering with the problem, but a root and branch reform that ushered in a fundamental change in the way the manufacturer brought its tyres to market. Conti’s plan was to form a network of independent truck tyre dealers, each with their own territory, to provide an effective nationwide service capability. The commercial division of the Conti-owned equity, NTS, disappeared, with some depots being bought out, others purchased by outside parties and a handful joining ContiNetwork, as the new chain was called. Certainly Continental needed to take some action, as its commercial tyre activities were consistently posting losses, and the radical surgery that was the introduction of the ContiNetwork was seen as the best way. So, 18 months or so on, has it worked? Has the patient recovered? At the time, there were some mutterings that the whole exercise was merely a precursor to Continental quitting the truck tyre business – something which, to be fair, the company has always vehemently denied. The company had turned its loss-making commercial activities into a profit, the ContiNetwork members were happy with the volume and profit they were making and the fact that no fleet customers had been lost indicates that they must be happy. Arthur Gregg, Business Director for Commercial Tyres, certainly believes that the future is bright and pays tribute to what has been achieved over a relatively short period. “We’ve gone from loss to profit and established what we regard as the UK’s premier independent network,” he said, concluding: “the truck tyre business makes a profit for us and for our partners.”
More than half of garages across the UK deliver low standards of service to customers, according to new research published recently. Key car industry figures have met with Consumer Minister Melanie Johnson and Industry Minister Alan Johnson to discuss the problem. The Ministers welcomed a pledge from the industry to sign up in principle to develop a ‘Good Garage’ scheme to tackle the low standards. A recent government-sponsored mystery shopping survey found that 51 per cent of garages missed one or more safety-related defects in cars or items that should have been picked up in a regular servicing. The survey also revealed that, only five per cent of garages sampled carried out a thorough service against the manufacturer’s schedule and were judged to be ‘very good’, · 86 per cent of garages missed at least one introduced fault · 40 per cent of garages missed at least one service item; 51 per cent if the customer was female, 33 per cent if the customer was male; and · 27 per cent of fast fit centres recommended unnecessary replacement of parts.
Smoking is bad for you. It doesn’t do your car much good either. If your emissions are not up to standard, not only is your car not performing optimally, but you might be breaking the law. What is on the market to help you diagnose faults in customers’ cars, and is there money to be made in it?
At the risk of stereotyping, the Italians do everything with a passion. They cook with a passion, and they eat with a passion. In the UK we tend to cook to eat and we eat to live. In Italy, the cook would be insulted if the diner only ate to live. The diner would not visit the restaurant of the chef who cooked without interest, without passion. That drive, that passion is to be found almost everywhere in Italian life, in politics, in motoring, in football, and in art and architecture. There is an ethos which cannot be called a work ethic, it runs deeper than the work ethic, it is quite simply more, almost spiritual in nature. That passion can be found at Marangoni. When visiting any tyre company there is a sense of pride in the company and its products. It has to be said that, in most companies, this is a foregone conclusion because the PR representative accompanying you is present to ensure that the corporate message gets across. However, when visiting Marangoni at Anagni, south of Rome, it soon becomes obvious that the passion runs deeper than a PR exercise. Marangoni Tyre is just one part of a larger Marangoni Group with a worldwide presence. Marangoni was established in 1950 and by 1960 was manufacturing retread tyres. A history of development, attention to detail and a keen eye on the market brought Marangoni to the situation where in 1989 the Group decided to move into new tyre production at Anagni.
There was a new look to the conference of the National Tyre Distributors’ Association, held at the Valparaiso Palace Hotel in Palma, Mallorca, in September. Entitled “InTyreActive”, the conference was designed so that the delegates set the agenda and discussed matters that they felt were important to the industry, rather than listen to a string of speakers. Having said that, the keynote speech was retained and association Chairman, Martin Rowlands, opened the event by introducing the speaker, Sir Tom Farmer. New format gets people talking as delegates debate a series of issues The NTDA conference promised something different, with the delegates deciding what was important and what they wanted to talk about. InTyreActive, as it was known, was a new concept to many attendees and it was run by a facilitator, who explained what was going to happen over the two sessions. Anyone could suggest a topic, the title of which was written on a piece of paper and stuck to the wall. Delegates added their names to the topics in which they were interested. In fact, the wall played a crucial part in proceedings, as notes taken at the meeting were pinned up for general reading, plus it was used for charts, comments and suggestions. By setting the agenda, the idea was, as the NTDA publicity said, “to explore the key issues facing your industry now and in the future.”
If the guys who sell tyres on the country’s fast fits are to be believed, the retread is dead. There are regular anecdotes coming back through the grapevine from customers who have been told that: they don’t make car retreads any more; you’ll only get 3,000 miles on a retread; or even more insidiously – they are dangerous – I wouldn’t have my mother-in-law driving on them… One wholesaler who had just delivered a batch of retreads to a client overheard that same client tell a customer asking for the very product that he had just delivered that they didn’t carry them! There may be numerous reasons for this misinformation about retreads. It may be that the fitters simply don’t understand the process of either tyre manufacture or tyre retreading. It may be that there are greater margins to be made from selling budget tyre brands. It may simply be down to personal prejudice. There is an assumption made by many in the tyre business that everyone understands what a retread is. Since very few in the tyre business understand the process of tyre manufacture, then even fewer are likely to understand the process of tyre retreading – yet the two are very closely related – especially in the hot cure process. T&A took the opportunity to tour one of the UK’s leading retread operations at Vacu-Lug to view both the hot cure and the precure methods operating side by side (these are the two main methods of retreading).
