Standing Out From the Crowd
Fate SAICI is something of an anomaly in South America. While the tyre markets in every other country in South America are led by the regional wings of multinational corporations, Fate is Argentina’s largest tyre producer ahead of Bridgestone Firestone Argentina and Pirelli Neumaticos. Tyres & Accessories asked Fate’s Walter Hack what it is that sets the company apart and learnt of some developments within the company’s product portfolio.
First and foremost Fate has been successful because of its technology. Fate is proud of the fact that it has been working has been part of a technical cooperation agreement with Continental since 1998. This works out well for the Argentine manufacturer, as it is able to use Continental’s technological know-how, but retains complete independence as a company. In return the company produces Continental branded tyres for sale in the important Mercosur region (see textbox). And of course keeping production quality at Continental’s high levels is in the interests of both companies.
Recent developments include the development of radial agricultural tyre production and the launch of the Antarctica winter tyre range in 2004. 150,000 of these winter tyres were produced in 2005 and the company says that the expansion is set to continue. The Antarctica range comes in seven size from 14 – 16 inch diameters and T and H speed ratings. As far as the agricultural range is concerned, the company will now produce 18.4R34 and 14.9R24 sized radial products in addition to its existing cross-ply lines. Production is scheduled to begin at the end of 2006, with additional sizes following in 2007 and 2008.
The most recent data shows that Fate is currently running at near full capacity (three shifts a day) and producing 15,050 tyres a day. Of these 13,500 are passenger car radial products, 650 radial truck tyres, 600 bias agricultural tyres and 300 bias truck tyres. In terms of raw production quantities this puts the company comfortably ahead of its domestic manufacturing competitors Pirelli Neumaticos (12,500 units daily) and Bridgestone Firestone Argentina (7700 tyres a day).
The company exports 60 per cent of its output, with the two largest destinations being Brazil and the EU. According to company representatives 175/70 R13 is the most popular size in Argentina, and it is interesting to note that this is exactly the same size that Continental chose to make its production debut with in neighbouring Brazil. However 14 and 15-inch sizes are beginning to penetrate the market and are expected to become commonplace in the next three to five years.
As far as the truck tyre business is concerned, Argentina is approximately 50 per cent radialised – not the worst, but not the best rate in South America.
Like Brazil, Argentina has extensive road networks, but also has very variable road quality. And once again this is seen as a key reason why customers continue to select cross-ply products over radials. The company also offers a product guarantee as a way of encouraging customers to switch to radial tyres. Interestingly, rather than partnering with an outside company to offer retread solutions, Fate offers a range of own-brand retread materials some of which it exports to neighbouring Brazil.
Fate Tire has been designing, engineering and manufacturing tyres since 1940. The company owns what it calls “a state-of-the-art industrial complex” which covers 120,000 square metres of buildings within an area of 100 hectares in the northern area of Buenos Aires. Despite its technical cooperation with Continental, Fate maintains its own engineering staff supported by a permanent technical assistance programme. The company also has a separate research and development unit. Quality control is said to be tight and as a result Fate tyres carry DOT, “E” and Brazilian in-metro certification not to mention ISO9001 and QS9000 approval.