Stamford Keeps Moving With Wheel Production
For the Stamford group Tyrexpo Asia has been a fixed event from the start, with both the company and exhibition being based in Singapore. Stamford, which is also listed on the Singapore stock exchange, is not only known within the tyre industry for its global wholesaling business; during the last three years it has also become very well known through its own wheel production activities. In 2004 Stamford Tyres began operating its Thai subsidiary Stamford Sport Wheels (SSW), which produces light alloy wheels in a low-pressure casting process. But because the new factory is already operating up to its capacity limits, the company is currently investing another 20 million US dollars in order to establish a second wheel factory on the same site near Thailand’s capital Bangkok, says Roger Chang, CEO of Stamford Sport Wheels Co. Ltd.
The initial plans to build its own factory arose when demand for Stamford’s private brand was growing ever stronger at a time when suitable offtake partners possessing additional capacities in the region were becoming more and more difficult to find. This led to the decision to trust in its own capabilities to install and operate a wheel factory rather than continuously exist in a state of uncertainty with regards to the supply situation, the CEO told Tyres & Accessories during an interview at Tyrexpo Asia in Singapore: “The supply situation with light alloy wheels had become an issue.” Consequently, the wholesaler and retailer decided to also become a manufacturer. Thus, since the beginning of 2004 Stamford has operated its SSW factory in Thailand and maintains about 300 employees there. These staff produce about 400,000 light alloy wheels in sizes up to 24 inches per year.
The $20 million that Stamford Tyres’ president Wee Kok Wah is now investing into the new plant is double what the company invested into the first SSW factory. Production is scheduled to begin at the new facility during the first quarter of 2008, and annual output will eventually reach 800,000 wheels, Mr Chang continued. The new factory will have a higher level of automation, thus the need for a higher level of investment (for the same output), but less staff is needed and quality is improving. To start with, the new factory will even have the technical capability to produce 26-inch wheels. As soon as the all-new second wheel factory is fully operational Stamford will have an overall wheel production capacity of 1.2 million units per year.
Stamford Tyres is able to sell a major part of its SSW branded wheels on Asian and the North American markets where chrome is very popular. However, Stamford doesn’t apply the chrome coatings itself, preferring to outsources this to an external service provider. During the three days of the Tyrexpo Stamford exhibited the vast majority of its wheel designs, amongst which, Chang says, were also the “more conservative wheels for Europe.” In Europe the Singaporean company cooperates with a number of exclusive wheel distributors.
Together with information on Stamford’s latest developments on the wheel front, Tyrexpo Asia was also a good environment in which to trade information on Stamford’s tyre business, which is foremost its wholesaling and retailing businesses. The company, for example, still has the exclusive distribution rights of brands such as Continental and Falken. But what is more interesting, Stamford is currently focusing on its Sumo Firenza private brand line-up. Even now this line-up already includes radial OTR tyres up to 57-inches in diameter. At the centre of the Sumo Firenza line-up are obviously the PCR tyres, which are sold through Tyre Trading International from the Netherlands into markets such as Germany, Denmark, Finland, Norway, Sweden and the Benelux states (see separate article in this Tyrexpo Asia review section). According to Pat Berrimen, senior vice president sales & marketing, Sumo Firenza is a “premium budget brand” which usually is sold about at ten to 15 per cent above major Chinese passenger car tyre brands. This is also true for Sumo Firenza truck tyres although the quality of these tyres would easily justify an even further distance between Stamford’s private brand prices and Chinese followers. Most of the Sumo Firenza tyres are produced in China.