Sri Lanka Tyremaker Bids to Re-invent the Wheel
(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.”
Loadstar’s closest rival in the global solid tyre market is Sweden’s Trelleborg, said the firm’s joint managing director, Koenraad Pringiers, whose family controls 60 per cent of the Sri Lankan company.
The $250-million firm is now working with top management consultancy McKinsey and Company to fine tune operations and ensure a firmer grip on the global tyre market.
“We want to double our turnover in three years. To do that we need to attract new talent to the company who can transform our vision to bigger things,” said Jinasena.
Loadstar makes industrial and construction tyres, rubberised tracks, wheels and rims at its Sri Lanka facility, catering to buyers in the U.S., Europe, Australasia, Africa and the Middle East.
Working across five plants situated close to rubber producing areas in Sri Lanka, the company turns out about 6,500 tyres daily for heavy equipment firms such as Caterpillar, JCB, Komatsu, Fiat, Yale and John Deere.
Loadstar is also making rubber tracks to replace the steel traction chains used in heavy earth-moving equipment.
The company’s 7,000 staff produce one of the biggest construction tyres in the world, with a diameter of seven feet (two metres) and weighing about 800 kilograms (1,760 pounds).
“These giant construction tyres are very costly to make due to high labour involvement because it is made using manual methods,” Jinasena said.
At this plant in Kotugoda, 18 kilometres (11 miles) from the capital Colombo, the male-dominated workforce handles complex machinery to make all sizes of solid and air-filled tyres.
Another plant nearby uses around 48,000 tonnes of steel annually to churn out heavy-duty steel rims to fit customer designs.
Manufacturers such as Toyota, Nissan and Komatsu prefer to buy fully assembled wheels with flaps, tubes and tyres that can be directly used in their vehicles.
“This single source helps them to cut back on inventory,” explains Jinasena.
The company scoops up 40 per cent of Sri Lanka’s annual production of 100,000 tonnes of raw rubber. It also imports about 15 per cent of its rubber needs. Tyre exports fill 700 containers each month.
“Our business has grown steadily over the years and we have kept our word with buyers despite the ups and downs associated with investing in Sri Lanka,” said Pringiers.
Pringiers, whose father Pierre teamed up with the Jinasena family to start the business in 1984, looks after marketing.
“The ethnic conflict here has not slowed down our orders,” he said, referring to the Tamil separatist conflict, which has claimed more than 60,000 lives since 1972.
“People keep asking us if its safe to live here, invest here and I say ‘yes’. We have had no problems. There are always risks associated with any business and you need to work around them,” he said.