Bridgestone Corporation has announced that it and its subsidiaries will expand their collective production capacity worldwide. It also announced that the Bridgestone Group will realign the geographical distribution of production capacity for different kinds of products. Bridgestone and its subsidiaries will invest approximately 250 million dollars in the production expansion and realignment, according to the announcement. The moves are measures to cope with the shift toward larger sizes of passenger car tyres in the industrialised nations and the growing demand for commodity-grade tyres in the newly industrialising economies of Asia and elsewhere.
Nokian Tyres has released its figures for the second quarter. Looking at the figures for the first six months, both turnover and operating profit were up on 1H 2001. Turnover rose 12.6 per cent to 193.3 million Euros (1H 2001 171.6 m Euros) and operating profit was 8.7 m Euros (6.7 m). Net profit was 1 m Euros (-0.8 m Euros). The good figures were the result of price increases, improved product mix and lower material costs. Most product groups showed increased sales, with the exception of retreading materials, and the Vianor retail chain lost 2.5 m Euros.
Indonesia and Thailand have threatened to cut rubber production. Indonesia and Thailand are planning an immediate 10 per cent cut in production in a plan to push prices up by as much as 30 per cent. Malaysia is expected to follow suite. If the cuts are effective it could result in 20 per cent price rises in the retail prices of tyres. In order to sustain the cuts, Indonesia and Thailand are proposing to convert rubber plantations into alleged cash crops such as cocoa and coffee. It is expected that the main beneficiary of this move would be Russia, the main producer of synthetic rubber.
Reports in the Straits Times claim that a 20 day detention order has been issued against Gajah Tunggal President Sjamsul Nursalim on money-swindling charges. There has been speculation that the move, which is one of a number against businessmen, might be politically motivated. A separate report asks whether the group will have to sell off assets to repay debts.
The price of rubber, at US$0.54, is the lowest for 30 years. Tyre producers, who buy two-thirds of rubber production, are being very cautious in view of the falling demand for cars in the large industrial countries. Thailand, Indonesia and Malaysia want to keep prices high through a cartel but to date have not been very successful. Competitors Vietnam and Cambodia are increasing production, which has kept prices low. The rubber producers are pinning their hopes on China which – if it joins the World Trade Organisation – will import more rubber.
Thailand, Indonesia and Malaysia – the world’s three biggest rubber producers – have agreed to cut natural rubber production by 4 per cent next year in an attempt to increase prices. However, traders are sceptical of the chances of success, saying that many rubber producers are small, private businesses which would be difficult to control.
Vredestein boss Rob Oudshoorn is interested in making the Vredestein brand – already well-known in Europe – a global brand. In Asia, T-Trac and Protrac tyres are produced by sister company Elangperdana Indonesia for use in the Asia region of Indonesia, Malaysia, Taiwan, Hong Kong, China etc. The Importer Tyreland is the business partner at the other end of the world in New Zealand. This has been learned from the latest company brochure News Flashes which is distributed to the trade. At the moment it is not easy to cover Vredestein stories due to the fact that there is obviously no press office in the Dutch company.
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.
The top three natural rubber producers, Thailand, Malaysia and Indonesia, want to set a minimum price for rubber on the world market and to limit supply. However, despite meeting twice in the past month, the three countries are unable to agree how these objectives might be achieved.