Boto Tyre to Build New Passenger Car Radial Factory
While tyre manufacturing investment projects in China are nothing new, the timing, investment and know-how associated with this project are noteworthy. Make no mistake, the company is aiming to sell its wares in Europe and is prepared to fulfil the necessary regulatory requirements in order to get there. In the face of turbulent times for most sectors of the world tyre market Boto Tyre have not only opted to paddle upstream in terms of investment and expansion, but are also ahead of the game as far as the law is concerned.
While some parties at the European distribution and wholesale end of the market are still clarifying the finer details of their part in S-marking, clean oil and the future rolling resistance legislation, this little-known tyre factory has already sent tyres to the TUV Shanghai office for noise S-mark compliance testing. As far as the clean oil and other legislatory requirements are concerned, the company are not yet up to speed with these, but with the lucrative European market at stake, it is a challenge Boto Tyre’s research and development department are determined to beat. This latest round of investment reportedly brings the total cash commitment associated with establishing the Boto Tyre manufacturing operation to around 4 billion yuan. According to company literature, which was established in 2003, Boto Tyre aims to be a leading light in the production and sales of all-steel truck and bus, OTR (and now passenger car) radials. The company employs over 2000 employees and reports US$300 million of fixed assets.
Currently Boto Tyre exports just over a third of the 1.5 million truck radials and 30,000 off-road radials it produces annually. Europe is said to be the primary export destination, closely followed by the US. However, with global demand remaining unpredictable, the company has gained the necessary ISO9001, CCC, DOT, ECE, GCC and Inmetro certificates to enable it to consider developing any number of the 90 countries it already exports to. Boto Tyre’s first truck and bus radials rolled off the Shandong production line in December 2004, with OTR radial production following in March 2006.
According to Rainbow Zhao, the main reason the company was able to progress to this level so quickly was because Boto Tyre’s production facilities were intentionally planned as a kind of tyre manufacturing ‘blank canvas.’ With the infrastructure built on a greenfield site, the company’s directors went to the expense of importing around 90 per cent of production equipment from European machinery makers. In practical terms this means inner liner extruders are made by companies like Troester, cutting lines by Fischer and the OTR tyre inspection equipment by VRM. Raw materials, of the company’s OTR tyres at least, are sourced from the likes of Bekaert and ExxonMobil Shandong Wanda Boto Tyre Co., Ltd., is the largest and fastest growing part of China’s Wanda Group, which is said to be owned by a panel of 10 shareholders.