Increased demand in Latin America has prompted Goodyear to resume production of aircraft tyres at its factory in Sao Paulo, Brazil. Manufacture of these tyres began in 1943 and was stopped in 1992. The biggest customer is Brazilian aeroplane maker Embraer; the fourth largest in the world, and which is currently constructing a new factory in Brazil. 30 per cent of the Sao Paulo aircraft tyres will be for the Brazilian market, with the remaining 70 per cent exported to North America, Europe, Asia, Latin America and Australia. Goodyear claims to be the world leader in aircraft tyre manufacturing.
The executive board of Continental has said that it is looking to sell major parts of the ContiTech group in order to reinforce Conti’s core business as a supplier of chassis technology to the auto industry. The revenue generated will enable Conti to make further acquisitions. ContiTech’s sales last year were 1.4 billion Euros and it employs 14,000.
Japanese tyre manufacturer, Bridgestone is going for more market shares, especially in the truck tyre segment. This could effect the market leader Michelin, who has about 30% of the market. Bridgestone is also increasing the prices in Brazil for the replacement market by 8% and the OE market by approximately 10%. The only option to the price increase is to walk away from a losing money business.
Michelin has announced a fall in net profits, from 535.5 million Euros to 154.4 million Euros for 1999. This is even lower than latest predictions of financial analysts. The figures were affected by the inclusion of a special provision of 370 million Euros, made to cover the entire cost of Michelin’s three-year restructuring plan. However, operating profit for the year rose to 1.23 billion Euros; an increase of almost 15%.
Pirelli’s truck tyre division generated a 1999 turnover of 466 million Euro and an EBIT of approximately 38 million Euro (eight per cent of turnover). For the current year the division has set itself the firm target of breaking the 500-million-euro barrier. The commercial vehicle tyre business accounts for almost 20 p.c. of Pirelli’s tyre turnover, in which the truck tyre factory in Alexandria/Egypt plays a key role. (The group also has commercial vehicle tyre production in Settimo Torinese/Italy, Izmit/Turkey and Santo André/Brazil). The enterprise started in 1990 with a mere 11 p.c. Pirelli participation in the 150 million dollar investment. And even that was not in hard cash but in know-how about building a new truck tyre factory and research and development data for the product. Other investors were local, both private and public finance consortiums. As Egyptian legislation was liberalised, it became possible for the Italians to increase their share to 60 p.c. by capital raising measures and to take the industrial leadership. Only two years after the start of building the first truck tyre was produced at the Alexandria factory. In 1995 the annual capacity was 100,000 truck tyres, today 330,000. In two investment stages capacity is to be increased to 550,000 tyres in the short term and to 800,000 tyres per year by 2003. But the plans do not only involve volume growth; new products are also part of the project, for instance the tubed tyres FG85 and TG85 for on/off application in Africa and the Middle East, introduced on the Truck Tyre Day 2000. The total investment plan is for 140 million Euro. Currently only a third of the truck tyres produced in Alexandria go to export, but in future exports will account for about half the output. Read more in NEUE REIFENZEITUNG 5/2000.
Czech tyre manufacturer Mitas is to purchase the motorcycle tyre manufacturing business from Trelleborg. The purchase (the price of which was not revealed) includes the license of the trade mark ‘Trelleborg’ and increases the Mitas motorcycle tyre portfolio by 15 designs in 57 sizes.
Bill Sharp (59) has retired suddenly on July 14th after 36 years of Service for the tyre maker. His successor, John C. Polhemus (56) used to be President of Goodyear’s Latin America region. Marco Molinari, currently Vice President Marketing and Sales North America, becomes Vice President Global Marketing Projects. Jim Vogel, currently Director Corporate Accounts North American Tire, becomes Vice President Marketing and Corporate Accounts for North America.
German company Degussa Hüls is building what it says will be one of the most modern industrial carbon black plants in the world at Paulinia, near Sao Paulo, Brazil. Production will begin in early 2002 and initial annual capacity will be 60,000 tonnes. Degussa Hüls says the new site will strengthen its role as a global partner of the rubber industry.
A year ago, there were rumours that Yokohama was seeking an alliance with Michelin. TYRES & ACCESSORIES recently visited the company and, in addition to factory and R&D facility visits, interviewed the President of Yokohama Rubber Company, Mr. Yasuo Tominaga. Mr. Tominaga spoke of the company’s wide-ranging restructuring plan and whether a company the size of Yokohama can survive alone in a global market dominated by the big three manufacturers.
In its last issue NEUE REIFENZEITUNG speculated about an agreement between Montupet and Michelin in the area of aluminium cast wheels. The talks seem to be “on hold” for the time being, because at the moment both partners have their hands “full with orders”. Montupet is currently doubling its capacity to 2.5 million cast wheels. Kronprinz, the Michelin subsidiary in Solingen, is able to cast 1.4 million wheels with the equipment already in place. In its search for a strategic alliance partner (without seeking a direct participation) Michelin has now found steel wheel manufacturer Meritor, which has factories in Mexico and Brazil. Meritor is a business division of Rockwell, the large supplier to the automotive industry, and is also known by the trade name Fumagalli. With an annual capacity of about 25 million steel and aluminium wheels Michelin is roughly double the size of Meritor. The strategic benefit for Michelin is not only the geographical location of the two Meritor factories, but above all the close relationship between the supplier Rockwell and Chrysler. The principal reason for the cooperation between M+M, however, was Renault’s decision to produce the Mégane also in South America with the same steel wheels as in Europe, where they are made by Michelin. To comply with local content requirements, the South American Mégane will have Meritor wheels.