Tyre Asia - Oct-Nov 2017 by Asian Busniess Media

rni no. MAHENG/2016/66859

VOL 8, ISSUE 5

OCTOBER / NOVEMBER 2017 US $ 20 ` 200

RUBBER

SPECIAL SUPPLEMENT: TYRE RETREADING

TYRE ASIA OCTOBER/NOVEMBER 2017

Harvey Brodsky

RETREADING WORLD MISSes HARVEY

Wang Zhongjiang, Chairman, Fengyuan Tire Tony Robinson

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Fengyuan Tire: rni no. MAHENG/2016/66859

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Cover Story

Editorial Retreading Needs Bigger Push

Letters

News Scan

Spotlight People in News

Obituary: Harvey Brodsky

Straight talk Need to Revamp Supply Chain System The is a need to ravamp the supply chain system in NR sector to help farmers increase revenue and sustain interest in farming, says Jom Jacob, Senior Economist, ANRPC

18-23 Perspective TBR Tariffs on Chinese Tyres It is too early to tell if a USD30/unit duty on TBR tyres from China will help the Indian industry, but it seems clear that the bigger issue is learning to manage the impact of price increases better, writes David Shaw

Class Action Lawsuits – Punishing Defective Product Manufacturers Louis Rumao on class action law suits against companies

26-27 Focus

Flood-Damaged Used Vehicles Vehicles damaged in natural disasters have presented problems for buyers when these make their way into the used car, observes Louis Rumao

Tyre Asia October/November 2017

Rubber

104 Technology

28-33

Management Building Agile Digital Enterprises Dr Dirk Torfs, specialist in management, applied science and engineering, comments on how management should provide the leadership to take on technological and manufacturing challenges of tomorrow.

Super Bosses Love Talent Sydney Finkelstein on groundbreaking truths about certain traits of people who could build and run world-class companies

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Rubber Impending Threats From Alternatives Dr PK Viswanathan of Amrita University, Kochi, on the rapid commercialisation of NR alternatives

Rousing Response to RubberTech The 17th International Exhibition of Rubber Technology (RubberTech China 2017) at the Shanghai New International Expo Center, Shanghai, was a resounding success, writes Venugopal P of Rubber Asia

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Technology Ready With Alternative Daniel R Swiger, founder of Yulex Corporation, thinks that the near-total dependence on natural rubber produced is Asia is not desirable for the industry

Guayule Can Turn Thar Desert Green

Autowatch

68-69

Product watch

70 Company watch

74-77

Events

78-85

Limelight

87-99

Retread Supplement

100

Rear View

101

Treadmarks

102

Reflections

104-105

My Vision: Turf Tech

Dr Shashi Kumar of ICGEB on commercial cultivation of guayule to produce industrial scale natural rubber as a supplementary to Hevea rubberplastics/rubber tyre in producing green steel

107

64-65

108

Race Track: Red Bull Strikes

My Vision

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Tyre Asia October/November 2017

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EDITOR’S LETTER

w w w.t yre -asia.com Vol. 8, Issue 5 October/November 2017 Editor Kurian Abraham President Antony Powath Associate Editor KS Nayar Executive Editor P Raghav Varma Correspondents Dr Louis P Rumao (Detroit, USA) Sharad P Matade Vice President (Marketing) Vijay Kurian Abraham Head-Marketing R C Devakumar Asst. Marketing Managers Anil Panicker Praveen Manchal Manager - IT & Digital Media Ranjith MR Design & Layout Sradha Art Sphere, Kochi

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Printed by Antony Scaria Powath at Five Star Offset Printers, Building no. 1/151, A, B &C, Nettoor, Maradu Muncipality, Ernakulam District, Kerala State, and published by him at 501/502 Imperial Plaza, corner of 27th and 30th Road, near Nilgiri Garden, Bandra (West), Mumbai - 400 050, on behalf of Asian Business Media LLP, 501/502 Imperial Plaza, Bandra (West), Mumbai - 400 050 Editor: Kurian Abraham

Retreading deserves bigger push

he demise of Harvey Brodsky, founder and head of Retread Tire Association (RTA) is a big blow to tyre retreading industry. Harvey was for decades an ardent and earnest campaigner for retreading, fighting hard against all attempts aimed at tarnishing the image of an industry that has only positives to offer – economically as well as environmentally.

in major automobile and tyre markets like India and China. Both are serious matters and in a way interconnected. The common factor is inadequate economic returns from the business for retread companies. This makes them reluctant to invest in latest technology, which in turn keeps the sector away from being more organized and professionally equipped to take up the issues.

Harvey used to say “there’s never a wrong time to do the right thing, and there’s never a right time to do the wrong thing.” He was spot on to connect this with tyre retreading. It is the right thing to do and there is never a wrong time to do it. Unfortunately, in spite of all the benefits that it offers, tyre retreading sector remains under the shadow of uncertainty and suspicion. The world is still reluctant to accept it the way it deserves.

There is an urgent need to spread awareness more widely and strongly about the great benefits retreading industry offers. More concerted efforts need to be made to educate all stakeholders, including companies and dealers, about the real picture. This is one of the aims of Asian Retread Conference (ARC) that Tyre Asia organizes biennially. The theme for ARC 2018 is ‘Better, Faster, Cheaper,” where the message is clear. The Retread Supplement that this issue of Tyre Asia includes also highlights these points through articles by experts in the field.

One of the persistent doubts in the mind of the consumer is why he should go for a retreaded tyre when cheaper new tyres are available. You cannot blame someone for buying cheap things. Cost matters. But it is when one considers the compromises made while going for a cheap tyre that the real benefits of a retreaded tyre come clear, such as safety, reliability, cost effectiveness and better performance over a long period. The shadow of uncertainty is in fact more over the so-called cheap new tyres flooding the markets than over retreaded ones.

This is when a campaigner like Harvey becomes relevant. The world must not remain in the dark about the positive difference tyre retreading can make to mobility. Being cheap does not make anything better or safer, particularly tyres.

Two other causes for concern over retreading industry are insufficient technological knowhow and the unorganized nature of the sector

Kurian Abraham Editor

Asian Business Media LLP Registered/Marketing Office 501/502, Imperial Plaza, Corner of 27th & 30th Road, Near Nilgiri Garden, Bandra (W), Mumbai - 400 050 Phone: +91-22-2640 0829, 2640 0735 Fax: +91-22-2641 189 E-, mail: asp@abm.net.in Editorial/ Marketing Office 39/3993- B7,Ground Floor, Vantage Point, V.R.M. Road, Ravipuram, Kochi - 682 016, India Phone: +91 484 4016284, 484 2356284 E-mail: mail@abm.net.in 22/37, 1ST Floor, Karpaga Vinayagar Koil Street, Alandur, CHENNAI – 600 016. Phone: +91 44 42641425 Lug Enterprises 2A Neethi Apartments, 84 I P Extension New Delhi 110092, lugenterprises@gmail.com US Representative Jennifer L. Poda, Publishers Representative, Akron, Ohio, USA, E-mail: jennifer.poda@gmail.com

European Representative John Stone Sapphire Media, 73 Chaney Road, Wivenhoe Essex, CO79RR, England, Tel: +44 (0) 1206 822320, Mob: + 44 7769 675232 Email: john.stone@sapphire-media.co.uk South America Carina Bini Fernandes Atman Filmes e Criacoes, SCLN 215, Bloco B, Sala 114, Asa Norte – Brasilia – DF, Brazil, CEP 70874–520, Tel: +55 61 3033 8007 +55 6181497800 (Brasil) +91 9895555281 (India) E mail: carina.bini@gmail.com Australia Jacob Cherian, Ausker Pacific Pty. Ltd. Suite 1, 1401 Burke Road, East Kew Vic 3102 Melbourne, Australia, Phone: +61 3 9859 8922 E-mail: ausker@auskergroup.com.au Japan Shinichi Kato, Shinichi Kato Office Co., Ltd., 11-7 Nihonbashikabutochou, Chuoku,

Tokyo 103-0026, Japan. Phone: +81 3-5645-8670 Fax: +81 3-5645-8671 Website: www.rubberstation.com Email: shinichi.kato@rubberstation.com South East Asia A. Divakaran A.D. Nair 33, Jalan PJU 1A/43F, Ara Damansara, Petaling Jaya, 47301 Selangor, Malaysia. Tel: +60 3 78454608, Mobile: +60 12 3985357 Email: aaps_avico@yahoo.com Thailand Ms Somruetai Patana-anek (Mott). Managing Director, Busgum Co. Ltd., 1093/115, 21st Floor, Central City Tower, Bangna-Trad Road (K.M.3), Bangna, Bangkok 10260, Thailand Phone: +66-2-3993946, 399-4374, 399-3896 Mobile: +66-1-8429105 Email: somruetai.patana-anek@busgum.com Sri Lanka Mr. P P Perera, No.20, 4th Cross Lane, Borupana Road, Ratmalana, Sri Lanka.

Tel: +94 11 4863529, HP: +94 772 972571 Email: ppperera1946@gmail.com Middle East Varghese Philip, Managing Director, Riqa International Co.LLC P.O.Box 39386, Dubai, UAE Phone: +971 4 2276825; Fax: +971 4 2276854 E-mail: vp39386@gmail.com China Monika Yu China National Chemical Information Center 4F, Building B, Huaxin Mansion, No.33 Anding Road, Beijing 100029 Tel: +86 10 64447112 Mob: +86 13911301837 E-mail: m.yu@cncic.cn Iran Azita Eftekhary Rubber Ind. Eng. & Research Company Karaj Highway Blvd. Pajouhesh, RIERCO, Tehran Tel: +9821 44787911 E-mail: azita.eftekhary@gmail.com

Tyre Asia October/November 2017

We miss you, Deva I

t was another month of mourning for Asian Business Media (ABM), publishers of Tyre Asia, Rubber Asia and AutoParts Asia when RC Devakumar, 51, Head Marketing, AutoParts Asia (APA) passed away due to a massive cardiac arrest on Monday, October 2, 2017. Deva, as he was popularly called, had been a vibrant presence with his remarkable energy and positive attitude. Within a short period of

time he gave a big boost to APA’s popularity through his immense hard work and great contacts. Charming Deva was marketing personified. He made friends will all whom he came across easily. Honesty, dedication and the ability and willingness to take on any challenge made Deva an integral part of the magazine’s forward march. His death came unexpectedly and was a huge shock to everyone –

his colleagues, contacts and friends. Deva hails from Muthaloor in Thiruvannamalai district in Tamil Nadu, India. He is survived by his wife Malathy, a school teacher, and sons Siddharth and Vasanth. It’s an irreparable loss for ABM. We, Deva’s colleagues and friends in ABM, bow our heads in his memory and pray God brings peace to his grieving family.

RC Devakumar

Letters

Artificial intelligence

our cover story on future tyre (Future Drives on Intelligence) is very timely. This is not just about tyre industry, but is the reality about all manufacturing industries. Automation and artificial intelligence will change the face of industries beyond anybody’s expectation. Perhaps it will most dramatically happen in transportation and mobility sectors. Mobility is not going to be the same as it is today. It is going to be driverless vehicles, electric cars and drone taxis flying around cities. Who could have expected the air-filled black tyres will one day become air-free, flatfree tyres that come in all kinds of shapes. A tyre is not just a tyre, but a combination of tyre and wheel – as in Michelin’s Tweel. Sam Gunasekharan Colombo

Future is today

he two cover stories published by Tyre Asia over the last two issues on intelligence machines and artificial intelligence are inter-connected. “Heralding New Age of Machine Intelligence” talked about how automation is taking over tyre making machine manufacture. Machinery makers like VMI are now aware of the need to keep in lane with the changes happening in tyre making and also in automotive industry in general. Tyre makers need entirely new kind of machines to suit their need for entirely new kind of tyres. The high investment industry of machinery manufacture will have to strategically change focus on how to suit their clients’ needs. Bhuvaneswar Kochi

Robots vs. Humans

he Sidewall cartoon on how robots will replace humans is relevant. But it carries a major warning of a crisis – laborers losing jobs. In a country like India, such a scenario is unthinkable. When millions depend on labor to make a living, bringing in robots to do their job will only lead to a serious confrontation. The arguments that humans will still be needed to get the robots running does not stand. It is only a flimsy attempt to appease workers. Even in IT sector retrenchments are creating big issues of workforce resentment. When that happens in manufacturing industries, the crisis will only be more serious. Of course, automation is a future reality. But somehow that will have to strike a balance with human needs. Feroz Mohamed Mumbai

Everything online

yre retailing is “fast forward” indeed. Even tyre companies are now selling their products directly online, giving tough competition to dealers. They are trying to change retail shops into family fun joints where the entire family can spend their time and relax while the tyre services are being done. It is a good move. Super markets are also turning into car servicing hubs. Innovative dealers are based at super market premises, offering service for the entire car, not just the tyres. While the owner can do shopping inside, his car will be serviced outside. This saves him another boring drive to the service centre. Online shopping for tyres make things even easier. Joseph John Kochi

Tyre Asia October/November 2017

News scan employment to 70 people and is expected to grow to over 150 employees before mid 2018. The state-of-theart manufacturing facility produces according to the latest Lean principles and is entirely prepared for future capacity expansion.

VMI Poland is a key element in VMI’s growth strategy and instrumental to the realization of the ambitious plans of VMI Group. The new facility helps shorten the delivery time of VMI’s high end equipment, while maintaining a competitive cost level. The facility operates next to the existing sites of the VMI Group, which now has entities in 8 countries on 4 continents.

The facility, built on an 8 hectare plot of land, comprises 13,500 m2 of manufacturing floor space, warehousing and offices. After the ground breaking ceremony in November of last year, construction took only eight months. At this moment, the facility offers

Harm Voortman, President & CEO of VMI Group: “This new manufacturing facility brings our global production capacity in line with current high order intake volumes and enables us to prepare for further growth. Our commitment to supply the market innovative solutions is clearly visible in this ultra-modern facility. We welcome the young and ambitious team of VMI Poland and wish them a lot of success.”

VMI opens new

facility in Poland

he new manufacturing facility of VMI in Leszno, Poland, was officially opened by Mr Lukasz Borowiak, mayor of Leszno and Mr Alexander van der Lof, Chairman of the Executive Board of TKH Group.

Dr Raghupati Singhania wins Business Leadership Award

K Tyre and Industries Limited Chairman and Managing Director Dr Raghupati Singhania has been awarded the Business Leadership Award for Excellence In Global Entrepreneurship at the 13th Indo-US Economic Summit organised by Indo-American Chamber of Commerce in New Delhi, India.

Dr Singhania received the award from Patrick O Santillo, Minister Counselor for Commercial Affairs, US Embassy, during the Summit. As India’s first company to roll out 10 million truck/bus radial tyres, JK Tyre has grown its presence to over 100 countries under the leadership of Dr Singhania.

Birla Carbon opens China plant B

irla Carbon’s largest engagement in China, its greenfield 120,000 metric tonnes carbon black project in Jining, Shandong province, has commenced operations. The Jining plant, which currently has an installed capacity of 120,000 metric tonnes, will expand to 240,000 metric tonnes in phase 2. Kumar Mangalam Birla, Chairman, Aditya Birla Group, said: “While the Aditya Birla Group has always had

Tyre Asia October/November 2017

a presence in China – we have not leveraged the potential that both we as a Group and China as a market place had to offer. We are delighted to have finally taken the right step to invest in a meaningful way in this great country of culture, history and civilization. ”He further stated, “The Jining plant is well ahead of its time, whether it be the manufacturing processes involved or the environmental standards, it follows.”

India imposes

anti-dumping duty on Chinese tyres

ndia has imposed anti-dumping duty on import of certain type of radial tyres used in buses and trucks from China for five years. The move is to protect domestic manufacturers from below cost shipments. The anti-dumping duty is in the range of USD 245.35 to 452.33 per tonne, said a notification by the Central Board Excise and Customs (CBEC). “The duty has been slapped on “new/unused pneumatic radial tyres with or without tubes and/or flap of rubber (including tubeless tyres) having nominal rim dia code above 16 (inch)” used in buses and lorries/ trucks,” a news agency report said. The levy follows recommendation for the same by Directorate General of Anti-dumping and Allied Duties (DGAD).

CEAT wins Deming Prize

EAT Limited (India) has won the 2017 Deming Prize. Anant Vadhan Goenka, Managing Director of the company has been selected for the award. The Deming Prize Committee announced winners of 2017 award on October 3, 2017. The awards will be presented in November. CEAT is the only tyre maker outside Japan to win this award. The Deming Prize Award Ceremony will take place at Keidanren Kaikan in Japan on November 8, 2017 followed by the celebration party. Prior to the award ceremony, the Winners Presentation by this year’s award winners will be held. The Deming Prize is a global quality award that recognises both individuals for their contributions to the field of Total Quality Management (TQM) and businesses that have successfully implemented TQM. It is the oldest and most widely recognised quality award in the world. It was established in 1951 to honor W Edwards Deming who contributed greatly to Japan’s proliferation of statistical quality control after World War II.

Spotlight

Zach Boaz to head Troester USA

Zach Boaz

fter 40 years at TROESTER, 20 of which in the U.S., Michael Neubauer leaves the company at the end of the year. For his succession, Germany-based TROESTER GmbH & Co. KG succeeded in winning with Zachary T. Boaz, an individual with significant technical and sales experience in the tire and rubber industries.

Boaz studied mechanical engineering and polymer materials at the University of Akron. Starting as a project engineer in the rubber hose industry, he moved into product design, tooling design and extrusion process development as an engineer with Mantaline Corporation. From there Zach transitioned into the aerospace industry as program management with Goodrich Corporation. Within a couple of years he was promoted to Business Development Manager. In 2010 he moved to a full-time international sales position in the tire machinery industry with The Steelastic Co., where he was eventually promoted to the VP of Sales & Marketing. Zach started as Executive VP for Troester Machinery, LTD on September 1, 2017 and will transition to President & CEO starting January 1, 2018. With his technical know-how in rubber and tire machinery, combined with international sales experience, Zach is an ideal fit for achieving TROESTER’s goals of more customer satisfaction and growth in the USA.

Mark-Bass

Mark Bass named President, Birla Carbon North America

ark Bass has been appointed as President, North America Region, Birla Carbon effective September 1, 2017. Bass assumes the role previously held by John Loudermilk, the newly appointed Chief Operating Officer (COO), Birla Carbon. In his new role, he will have full P&L responsibility for North America and will join the company’s Senior Management Team reporting to Loudermilk. Bass joined Birla Carbon in 2010 as the Director of Sales for North America. In 2013, he assumed his current role as Global Sales Head, Specialty Blacks and relocated to Bangkok, Thailand before returning to the United States in 2016. He has over 23 years of industry experience in business management, sales, manufacturing and technical service serving in leadership roles for Solutia Inc., NuQuest Inc., and Peach State Hardware. He holds a Bachelor’s degree in Chemical Engineering and Master’s Degree in Business Administration.

Scott Rogers to lead Goodyear NA consumer business oversaw all aspects of advertising and marketing for the company’s consumer tyre business, including the Goodyear, Dunlop and Kelly brands. He had taken on additional responsibilities over the past few years at Goodyear, including overseeing 600 company owned retail stores and the racing tire business.

Scot Rogers

Mike Dwyer

Mike Dauberman

. Scott Rogers, former marketing director for Procter & Gamble, is named by Goodyear Tire & Rubber Co as President of its North America consumer business. Rogers was marketing director for the North American Hair Care division of the consumer goods such as Pantene and Head & Shoulders shampoo.

Rogers had been chief marketing officer for the North America consumer business of Goodyear since 2009. He

Tyre Asia October/November 2017

Goodyear has also promoted Mike Dwyer as chief marketing officer and Mike Dauberman as chief digital officer. Both will report to Scott Rogers. The company said Dwyer will be responsible for brand, product and retail/shopper marketing; interactive/e-commerce; market research; and Goodyear Racing. He joined Goodyear in 2014 as marketing director for its North America consumer business, where he was instrumental in extending Goodyear’s relationship with college football and establishing the Goodyear Cotton Bowl Classic. Dauberman will focus on continuing to strengthen Goodyear’s connected business model to enable the company and its customers to win in a rapidly changing environment. The company said he will focus will be identifying new initiatives to accelerate Goodyear’s consumer business and leading a Digital Center of Excellence for the region.

OBITUARY

Jacob Peled, Founder and Executive Chairman of the Pelmar Group of companies, and Harvey Brodsky, founder of Retread Tire Association (RTA), committed champion for tyre retreading industry, have been life-long friends and associates. Harvey succumbed to cancer on September 17

My dear Harvey By Jacob Peled

am actually very upset at you personally, for having left this world which you loved so much. If I could talk to you now face to face, we would probably be exchanging jokes and gossiping about the retread industry that became an inseparable part of your soul. I remember how many times, when I told you that it’s time to rest, your answer was “you’ll have plenty of time to rest when you’re dead”. Now you have time, but knowing you, you are probably up to something which is unusual, rare, but never unethical. When I met you for the first time 41 years ago, the first thing that impressed me was your positive attitude towards almost everything in life and your deep dismay of bigotry, lies and inequality. I remember what you told me when we were standing in the rain on a dreary day in Akron. I told you how I hate this weather. Your immediate response was “You don’t hate the weather, you hate Hitler or bigotry.” Harvey, since that day I have never used this term.

think this is what attracted people to you. You have over the years rather often, asked me for professional advice and assistance. You have always thanked me for it. You have never taken it for granted. The only thing you have taken for granted is the necessity for you to assist other people. One of your greatest impacts was your love of reading literature of any kind. I have never seen anyone who carried with him on every trip, so many books. You would always give those books as presents to other people when you had finished reading them. You have taught me the love of literature and to many others. The one thing that makes me happy about your departure is that you do not have to see the miserable time that our industry is going through. I do not remember a more difficult, unrewarding period for the retread industry as it is now, despite the fact that it is still the No. 1 tire recycling. The low price tyres coming mainly from China are hurting this industry, in a manner that is hard to describe. We know it will be over, but it does take its time and toll.

Out next encounter was in Louisville, Kentucky, at the Harvey Brodsky ARA Retread Show. You decided that we shall be walking to the hotel, which was In our business, there are few giants like you and it “only” 5 miles away. You picked up an old newspaper makes our industry special. I want to thank you Harvey and threw to a garbage can. Your words were “if for the many years of true friendship, but I still cannot everyone picks up one piece of garbage a day, the world forgive you for leaving us. Like most people in the tyre will become the cleanest place.” Ever since, I pick up and rubber arena, we love you. some garbage every day, despite the fact that the world Rest in peace my friend. I will never forget you. has not yet become cleaner, but it will. As you would say: In so many ways you have shaped my life and influenced me, like many other people, in your simple, “As ever” straightforward and very convincing opinions, as you had an opinion about everything, mostly positive. I Jacob

Tyre Asia October/November 2017

Straight Talk

Need to revamp supply chain system TA News Bureau How significant is the ANRPC Annual Assembly 2017 considering the current global NR situation? Jom Jacob

The 40th annual session of the Association of Natural Rubber Producing Countries (ANRPC) will be held in Ho Chi Minh City, Vietnam, on Oct. 27. The 10th Annual Rubber Conference will also be held during the same week, which is expected to be attended by around 350 invited guests from about 20 countries. A major focus of the conference will be on the need to ravamp the supply chain system in order to help farmers increase revenue and sustain interest in NR farming, says Jom Jacob, Senior Economist, ANRPC

Besides a review of demand-supply situation and price trends, ANRPC will evaluate the progress of various projects and studies undertaken by it the organization. As a new initiative, in 2017 ANRPC has introduced collaborative studies by establishing linkage with institutions and organisations both in the private sector and government sector. The ANRPC Public-Private Meet on Oct. 24 will discuss the outcome of two important studies being undertaken in collaboration with the Malaysian Rubber Products Manufacturers Association (MRPMA) and the Securities and Exchange Board of India (SEBI). The Assembly, which is the supreme body of the inter-governmental organisation representing the interest of more than 10 million rubber producers in the world, is expected to come out with new decisions and programmes to help the world natural rubber production sector to be competitive. In the context of continuing market uncertainties and challenges facing sustainable growth of world NR production sector, joint efforts and collective decisions through this inter-governmental forum of natural rubber producing countries assume significance.

Could you please elaborate on the theme of the conference: â&#x20AC;&#x153;Reengineering Value Chain for Revitalizing Production Sectorâ&#x20AC;?? The Annual Rubber Conference is being held against the backdrop of continuing market uncertainties and concerns clouding on long-term prospects of rubber cultivation. Nearly 90% of the world production comes from smallholders who are sensitive to fall in prices. Continued low prices have largely dissuaded them from proper maintenance of holdings. As a result, the production sector has become increasingly inefficient in terms of the average yield per hectare of harvested area. In the 11 ANRPC member countries, constituting 90% of the world production, the average yield has continuously fallen

from 1,347 kg/ha in 2013 to 1,231 kg/ha in 2016. This is despite development and release of high-yielding clones by rubber research institutes across countries and the introduction of improved harvesting methods. To revitalize the production sector, it is necessary to generate renewed interest among farmers so that they will actively involve in farm activities. To generate interest among farmers it is essential to make farm income more attractive. In some of the producing countries, it is possible to achieve 30% increase in income by addressing the low farm-gate prices. Farmersâ&#x20AC;&#x2122; income can be more than doubled by addressing the yield gap between laboratory and the field in the case of a few other producing countries. For example, the average yield realised in Indonesia during 2016 was 1,045 kg/ha and that in the Philippines was 694 kg/ha. But, the potential yield of the clones developed by research institutes in these countries is more than 3,000 kg/ha. In a few cases, poor quality of the produce deprives farmers of the potential higher income. In short, farmers by and large lose considerable income due to inefficiencies in supply-chain infrastructure, value-chain system and information dissemination system in the market. Farm income can be considerably increased by thoroughly reviewing the existing supply-chain system in each country, identifying the weaknesses and revamping them. While there are limitations to influence market prices, ample opportunities are available to support the income of farmers by focussing on supply chain and value addition. The four talks and two panel discussions of the conference programme are focussed on this theme. The two panel discussions represented by key policy-makers in the 11 countries are expected to unfold the opportunities available to revitalize the production sector by reengineering the existing value chain.

What is your take on the current global NR scenario? Is 2017 a better year? How good could 2018 be? World supply of NR is anticipated to rise Continued on page 77

Tyre Asia October/November 2017

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Perspective

TBR TARIFFS ON CHINESE TYRES It is too early to tell if a USD30/unit duty on TBR tyres from China will help the Indian industry, but it seems clear that the bigger issue is learning to manage the impact of price increases better David Shaw

By David Shaw*

s I write, the Indian government has announced anti-dumping tariffs of up to USD452/tonne on TBR tyres imported from China. The decision comes in the wake of a complaint by India’s tyre makers, put forward in April 2016. The process is known to take around 18 months, and so it has gone according to due process.

since the start of this year.

A rough rule of thumb suggests that a truck tyre weighs about 60kg. That has been increasing worldwide, as the trucking industry moves toward super-single tyres. I tend to use an average figure closer to 70kg nowadays.

At the beginning of this year, the United States was expected to impose an anti-dumping penalty (ADD) of around 22% and a further 52% countervailing duty (CVD) on Chinese TBR imports. At the thenprevailing value of USD80 per tyre, that would correspond to an ADD of USD17.6 and a CVD of USD 41.6, or roughly USD60 per unit. At today’s customs values of just over USD100 per unit, it corresponds to import duties of USD77 per tyre.

Based on this approximation, the Indian duties correspond to about USD30 per tyre. The going wholesale rate in China for a domesticallyproduced, no-name truck tyre has been around USD100 per unit for the last few years. It ticked up in the last 12 months due to higher input costs in China, and now stands at about CNY900 per unit. That corresponds to about USD140, or INR9000 in late September 2017. These rule-of-thumb values are supported by US customs data showing the average declared customs value of Chinese tyres in 2016 was USD91 per unit (that’s 9,971,791 tyres valued at a total of USD 910,777,644). The average import volume (to the US from China) in 2016 was around 831k per month. That plunged to about half normal levels in the period from FebApril, and has since recovered to more normal levels, despite a 30% increase in declared customs value

Tyre Asia October/November 2017

Month (2017) Imported units

Jan

Feb

Mar

April

May

June

July

825k 486k 306k 407k

613k

639k

803k

Average 80.17 83.67 85.38 95.81 100.70 106.45 104.06 unit value

These were never imposed because the Commission found, in a shock result, that Chinese imports had not damaged the domestic US truck tyre manufacturing industry. That decision is currently being challenged in the US courts by the Steelworkers’ Union (USW) that originally brought the complaint. A couple of years ago, the Russian region, called the Eurasian Economic Commission (ECE) imposed duties on Chinese TBR tyres. These ranged between 14.8% and 35.4% and were imposed for a five-year period from September 2015. These duties were on top of an existing rate of 11.7%, bringing the overall duties to somewhere between 25% and 47%. The higher figure applies to the vast majority of importers, while about 30 named importers were

given lower rates – mostly below 20%. This favoured group includes most of the better-known names in China’s truck tyre business. The third main investigation into China’s truck tyre exports comes from the European Commission. This was announced in August 2017, but according to the expected timetable no decision is expected before November 2018. There is no indication on the level of duties that might be imposed.

Are India’s duties enough? In the light of the harsh duties that were proposed in the United States, it has to be asked if the $30/unit duties imposed in India will be enough to protect Indian tyre makers. The stock markets appear to think so. Share prices among the main tyre makers jumped 10% after the anti-dumping rates were announced.

he argument in the US was that domestic tyre makers simply increase the prices of their tyres to the point where Chinese tyres become competitive again. And that is borne out by the data above: despite a USD25 per unit increase in value, Chinese tyre imports to the US doubled in the period from April to July

Indian tyre makers have a very clear cost structure. Corporate reporting rules in India require companies to publish their raw materials costs. For the top companies, this is public information. In the last few years, the top tyre makers have spent upwards of 60% of net revenues on raw materials.

raw material price fluctuations. We have seen this in the financial results of all the main tyre makers. While revenues increased over the previous year, costs increased even faster, driving operating profits down, or even into the red in the case of JK. Taking the results of the top-5 tyre makers in India (MRF, Apollo, JK, BKT and Ceat) together, revenues for the three months to June increased by 12%, but operating profits fell to less than one-fifth of the year-before figure, due to a 31% increase in raw materials costs. Chinese tyre makers suffered the same fate. Their first-half (six months to June) financial results showed the same pattern. Some dropped into the red, while all of them saw profits fall substantially, even though revenues increased. It is too early to tell if a USD30/unit duty on TBR tyres from China will help the Indian industry, but it seems clear to me that the bigger issue is learning to manage the impact of price increases better. The argument in the US was that domestic tyre makers simply increase the prices of their tyres to the point where Chinese tyres become competitive again. And that is borne out by the data above: despite a USD25 per unit increase in value, Chinese tyre imports to the US doubled in the period from April to July. This means that the tariffs might help the tyre makers, but it will damage the fleets in India, who rely on tyres to keep their trucks running.

This makes them heavily exposed to sharp movements in raw materials prices, such as those seen in early 2017, and another wave that may be coming through in the final quarter of 2017.

Unless, of course, the famously porous coastline sees an increase in mis-declared goods arriving from China, and those find their way into the economy, with minimal benefit to either the Indian government, or the tyre makers, who will have to keep prices low in order to compete with a big increase in illegal imports.

This cost structure is very similar to the situation in China, where tyre makers are also heavily exposed to

*David Shaw is CEO of UK-based Tire Industry Research Tyre Asia October/November 2017

Perspective

CLASS ACTION LAWSUITS – PUNISHING DEFECTIVE PRODUCT MANUFACTURERS The class of alleged victims — the clients of the suing law firm — is often a secondary concern, and is usually left with relatively little financial benefit, sometimes merely a few cents or a discount coupon, while the lawyers get the lion’s share of the spoils Louis Rumao

TA Louis Rumao

n the United States, manufacturers of consumer goods have a lot to fear not only from the government, but increasingly of becoming the target of a class action lawsuit. Most major corporations (read deep pockets), and many smaller ones are subject to class action litigation. One can access www. classaction.org website to peruse the list of thousands of lawsuits currently grinding through the US court system, and hundreds are being planned, just awaiting a cause and a place-holder “victim” as a lead plaintiff. A class action lawsuit is when one (or sometimes a few people) files a single lawsuit on behalf of a larger group of people (called the “class”) who have the same or similar legal claim. Class action lawsuits are designed to help streamline the legal system by combining tens, hundreds, or even thousands, of individual lawsuits into a single coordinated legal action. In reality, when a consumer who is dissatisfied with a product, he or she does not run to a lawyer. Usually the lawyers find a “class representative,” a person to use as a placeholder for a class-action lawsuit. Law firms, trying for a windfall in huge fees, do research to identify a suitable target company, write a lawsuit against that defendant - without that company knowing anything about it, and

Tyre Asia October/November 2017

then find a “lead” plaintiff to represent the class of “victims.” Federal judges have complete discretion about whether to certify a lawsuit as a class action lawsuit, and also to fix lawyers’ fee. Once certified as a federal class action, an otherwise small lawsuit turns into a massive cash drain for the target company and a money machine for the lawyers. The real goal of many of these lawsuits is to extract a large attorney fee for the law firm bringing the case. Once the case is in place and filed in court, the lawyers pressure the target defendant company by demanding all sorts of information, and thus “encouraging” it to settle out-of-court. Then they negotiate a token compensation for the users of the product, plus a large attorney’s fee, which is in essence a payoff to drop the matter. The members of the class (the consumers) who bought the product may get a few dollars apiece, or a coupon for some more of the offending items, along with a cumbersome process to obtain their meager winnings, by submitting proofs of purchase.

Tyre industry and lawsuits No manufacturer or retailer is immune, and the tyre segment is no exception! Recently, Michelin North America has been named in a class action

lawsuit for misrepresenting tread depth on some tyres, as was reported by gotaclassaction.com . New tyres used on passenger cars typically start with between 9/32’’ to 11/32’’ of original tread depth, depending on vehicle model. Tread depth for the tyres at issue in this lawsuit are alleged to be consistently at least 1/32’’ less than the tread depth represented by Defendant Michelin in its Specification Documents. Because of that, Plaintiff and Class Members allege that they have received approximately 10% to 12.5% less tread depth and usable tread, and therefore an equivalent reduction in tyre mileage, use, and value compared to the same tyre with tread depth as actually represented by Defendant. In a class action case against Continental Tire North America in December 2006, a plaintiff alleged that Continental distributed a specific type of tyre with the knowledge that it would wear prematurely, and the action affected thousands of people across the United States. According to a report on www.floridatirelawyer. com, an agreement was reached between the plaintiffs and the defendants, pursuant to which Continental was ordered to pay between $5 million and $8 million to settle the case in the District of New Jersey. Even tyre retailers and service centers are not immune from this! In August 2016, a New York law firm filed a class action lawsuit against Belle Tire Distributors Inc, claiming that the tyre dealer deceptively told customers that they had

to buy more tyres than they needed to avoid their car warranties from being voided. As reported by media, the lawsuit lists six counts against Belle Tire including common law fraud, negligent misrepresentation, unjust enrichment and violation of the Consumer Protection act. The suit seeks compensatory & punitive damages, the amount by which Belle Tire enriched itself, and of course, attorney’s fees, experts’ fees and court costs! Feeding the frenzy of these lawsuits is that the suing lawyers know that most cases are going to be settled instead of prosecuted in a court. Settlement, as opposed to a prolonged legal battle, is often preferred, especially by large corporations. The suing lawyers and their clients get rewarded right away, and limit legal costs and negative publicity for the defendant. In the well-publicized tyre defect case involving Ford’s Explorer SUV and Bridgestone/Firestone tyres, Ford chose to aggressively settle the numerous cases. The then Ford President Jacques Nasser said that settling the cases is usually the best option for Ford and plaintiffs. “If we can reach a compromise, a fair compromise with our customers where they have some certainty and peace of mind, that to us is much better situation than going into a prolonged legal battle. You’d like to get it behind you and that’s what we would like to do,” Nasser said. And that sentiment suits the suing lawyers just fine! Tyre Asia October/November 2017

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FOCUS

Flood-damaged used vehicles The total damage due to Hurricane Katrina of 2005 is estimated at $108 billion, with nearly 570,000 vehicles damaged beyond repair. Vehicles damaged in natural disasters have presented problems for buyers when these make their way into the used car market By Louis Rumao

fter every hurricane and typhoon, debate begins whether the event was caused or made worse by global warming. Climate-change believers and the deniers argue their opposing viewpoints, while a reasonable climatologist would say that the storms are caused by “natural Louis Rumao variability,” and possibly “enhanced by global warming”! In USA, Hurricane Katrina had devastated parts of New Orleans, Louisiana, and surrounding areas in August 2005 and was one of the costliest natural disasters in US history. According to the US Federal Emergency Management Agency (FEMA), the total damage due to Katrina is estimated at $108 billion, with nearly 570,000 vehicles damaged beyond repair. Hurricane Sandy (unofficially referred to as “Superstorm Sandy”) in October 2012 was the second-costliest hurricane in United States history, with current estimates of damages in excess of $75 billion. It is estimated that Sandy damaged at least 250,000 cars in the affected areas when it hit the East Coast and states as far west as Wisconsin. Some cars sat submerged for days in up to four feet of flood waters, damaging components and leaving interiors moldy or mildewed. The Southern states of USA were hit by another major storm few days ago - Hurricane Harvey swamping Texas and Louisiana, and as of this writing, Hurricane Irma is pounding Florida and nearby states. Industry experts estimate that up to one million cars were damaged in flooding caused by Harvey in Southeast Texas and Louisiana, many beyond repair.

Flooded vehicles After each major storm, vehicle owners and insurers need to decide how to deal with the damaged vehicles.

Tyre Asia October/November 2017

Cars that are damaged, but are economically repairable, receive a “salvage” title that is a different colour to alert potential buyers of the fact it had been damaged. If the cost of repairs is more than 60 per cent or so of the restored value of an older car, the insurance company might declare it totaled. It depends on the age, mileage and real-world value of the car. Vehicle owners are paid a fair market value for its prior-damage condition, less any deductibles. Totaled vehicles that are unrepairable receive an “undeliverable” title and are sold to salvage yards for recycling and/or demolishing. “The reasons are simple,” said one insurance company’s claims manager for the region. “We don’t want our people working around those cars and we don’t want them back on the road.”

Buyers beware! Vehicles damaged in natural disasters have presented problems for buyers when these make their way into the used car market, according to Jeff Bartlett, deputy editor for autos at Consumer Reports magazine. “Fortunately, the consumer protections have improved over time, but this ongoing tragedy is a reminder for all shoppers to be vigilant and diligent when purchasing a

sed-car shoppers need to keep a wary eye for vehicles that end up back on the market, some illegally. It is estimated that in 2017 more than 326,000 “flooded” cars were on American roads, and that number is sure to grow in the aftermath of recent hurricanes used car,” Bartlett said. “And to factor an inspection by a professional mechanic who is not associated with the sale.” Used-car shoppers need to keep a wary eye for vehicles that end up back on the market, some illegally. It is estimated that in 2017 more than 326,000 “flooded” cars

were on American roads, and that number is sure to grow in the aftermath of recent hurricanes.

• Check to make sure the speakers work; door-mounted speakers will often be damaged in a flood.

“Unfortunately, some of the flooded vehicles may be purchased at bargain prices, cleaned up, and then taken out of state where the VIN (vehicle identification number) is switched and the car is retitled with no indication it has been damaged,” the National Insurance Crime Bureau (NICB) said in a statement.

• Pay close attention to the wheels; aluminum alloys may be coated in a white powder and show signs of pitting, small dimples in the material.

The NICB cautions that used-car shoppers need to be vigilant in the weeks and months after a major flood. The agency recommends the following steps to ensure you don’t end up with a flood-damaged used car. • Select a reputable car dealer and use a VIN checker to ensure the car does not have a salvage title. In the aftermath of Hurricane Harvey, CARFAX has offered to check VIN’s and car history for free. (www.carfax.com/ flood)

• Have a mechanic inspect the vehicle prior to purchasing it.

Tyres and wheels While not specifically formulated to be waterproof, multiple layers of rubber-coated steel belts and fabric essentially do make tyres waterproof. But if a tyre has nicks or cuts that allow water to seep inside, the moisture eventually will rust the steel belts or degrade the cords, or both. Long exposure to contaminated water could also make tyres unusable. “The same detailed inspection approach should be used,” says a tyre compound engineer for Goodyear. “Let some air

Cars caught in Hurricane Harvey (photo courtesy: http://imagesvc.timeincapp.com)

• Inspect the vehicle for water stains, mildew, sand or silt under the carpet, floor mats, headliner and dashboard. • Inspect the upholstery and door panel materials for fading. • Check for rust around screws in the center console area and areas water doesn’t usually reach. • Check for mud or grit in the spare tire compartment and in small crevices under the hood. Also look for rust and corrosion under the hood. • Inspect the seat belt retractor for moisture, mildew or grime.

out the valve stem to see if any water comes out,” he said. “If any does, then you want to dismount the tyre to check it out further. If tyres have cuts or nicks or plugs or patches, it’s a good indication that water would have penetrated into the tyres upon submersion and you could have a problem with potential degradation.” Even though tyre rims are covered with rust-resistant coating, one should check the rim thoroughly. If rust does appear, especially where the rim and tyre bead meet, you could experience air loss or rim slippage. The bottom line, if a used car deal looks too good to be true, it probably is! Tyre Asia October/November 2017

MANAGEMENT

Building agile digital enterprises Lommel (Belgium)-based industry research powerhouse Flanders Make is a centre of collaborative research between universities and industry translating concepts and research into products and processes. Heading the industrial research centre is Dr. Ir. Dirk Torfs, a specialist in management, applied science and engineering. Under his watch the organisation has gained global reputation as a strategic research centre for the manufacturing industry. Through tie-ups with five Flemish universities it is doing top-level innovation developing new products and processes for the manufacturing sector. In this interview Dr. Ir. Torfs, who is also pushing for international cooperation in innovation and product development, speaks of the emerging industrial revolution and comments on how management should provide the leadership to take on technological and manufacturing challenges of tomorrow TA News Bureau

There is a view that no industry can ignore the fundamental changes that Industry 4.0 will generate to build digital enterprises. What are your views on this? I agree. Industry 4.0 or the digitalization will have an impact on all enterprises in all sectors. Enterprises need a digital transformation plan to cope with the new technologies and methodologies in order to strengthen their business offer and create added value. Transparency and proximity are becoming increasingly important as end customers interact more and more directly with companies. Social media makes it necessary for companies to be agile and to increase the speed of response. Anticipation and proactive behaviour is paramount as negative impact on a brand is hard to swipe away. I strongly believe that Industry 4.0 will fundamentally change the business as it creates enormous opportunities for agile companies. However, there are four main pre-requisites for companies to generate a positive return out of Industry 4.0: 1. Strong companies have innovation, agility, acceptance to change and a collaborative mindset in their DNA.

Dr. Ir. Dirk Torfs, CEO of Flanders Make

2. Companies need to ensure a change-mentality with all employees at all levels to secure the adoption of new ways of doing business (new business models) and integrating new technology across the entire organization. 3. Intensified collaboration is critical for success. Thatâ&#x20AC;&#x2122;s why companies need to develop a collaborative environment, both internally (between employees and between departments) and externally (with other small and large companies). 4. Companies should realize that speed of innovation creates the biggest competitive advantage. Intellectual property rights become negotiating power rather than protection.

What are the strategic priorities that CEOs should take to link business requirements and market trends by melding disruptive technologies? I see three priorities. 1. A CEO is to be very open minded, well connected

Tyre Asia October/November 2017

Research engineer Asad Tirmizi, specialized in robotics, at the laying of the first stone of Flanders Make’s new infrastructure

to the business and concerned about scenario planning. Making budgets is out of date. Today, as part of the strategic agenda, companies should analyze the scene, look for the main market drivers and create ‘possible future’ scenarios for their business. These scenarios need to be monitored with a proper early warning system to anticipate the future and to detect when a certain scenario is more likely to impact the business. That’s how companies create a competitive advantage (e.g. Shell suffered the least from the oil crises in the 1970s because the company had foreseen a scenario for such a crisis). 2. A CEO should spend time on both technology innovation and changes to the business model as new, disruptive technologies will create new opportunities which will not only be technology related but also business related. Companies will have to evolve from selling assets (products) to providing services (maintenance services on products) or to productivity or output services (guaranteed output of production assets). In reality this is a revolution based on an AND-ANDAND scenario rather than an OR-OR-OR scenario. Customers will choose one of more products out of the portfolio depending on their needs. This will significantly impact the company’s revenue generation. Timing of revenues is different, balance and outcome statements can no longer be compared and investors need to analyze these companies in a different way. Companies will need to focus on long-term revenues and a sustainable revenue/profit stream rather than a yearly revenue/profit stream.

3. A CEO needs to make a digital transition plan for the implementation of Industry 4.0 such that people can be prepared for coping with the required change and can accept the different changes that are needed. Building up market intelligence is crucial, trends need to be analyzed and consequences on the business need to be determined. The plan involves

CEO should spend time on both technology innovation and changes to the business model as new, disruptive technologies will create new opportunities which will not only be technology related but also business related technology (R&D, engineering and production, need for human interaction), sales (market approach and communication), people (training on communication, interaction skills, technology, adoption of change, etc.), change of labour relations, type of employment, type of investments, etc. The purpose of the digital transition plan is to create agile companies with people that are ready for change, ready to learn to execute new tasks and to take responsibility and accountability in their new roles and functions. The most agile companies will Continued on page 86 Tyre Asia October/November 2017

MANAGEMENT

Superbosses love talent Companies are known by their high-octane leaders. An enterprise is what these bosses make them to be, whether small or big. This is the truism of management. It was while studying the characteristics of superbosses that leadership guru Sydney Finkelstein discovered groundbreaking truths about certain traits of people who could build and run world-class companies. This Professor of Strategy and Leadership at the Tuck School of Business at Dartmouth and Director of the Center for Leadership speaks to Tyre Asia about what makes superbosses. He is also the author of 20 books with several bestsellers, including Why Smart Executives Fail and the latest SUPERBOSSES: How Exceptional Leaders Master the Flow of Talent

TA News Bureau

ydney Finkelstein, the Steven Roth Professor of Management and faculty director of the Tuck Executive Program (TEP) at the Tuck School of Business at Dartmouth College, is a much sought after management consultant and speaker to senior executives around the globe. As an executive coach, whose focus is to unravel and develop management talent, has seen an enormous number of enterprises perfect strategies for growth. He is listed in the ‘Thinkers 50’ of the world’s most prestigious ranking of leadership gurus and authored 20 books including best sellers Why Smart Executives Fail and the latest SUPERBOSSES: How Exceptional Leaders Master the Flow of Talent. In an interview to Tyre Asia he said his research has found many superbosses in China, India and every other country he looked at. “There is a stronger family influence in many countries to be sure,” he commented about Asian corporate leadership. “It translates into a much lower likelihood that talent will leave. But the same factors that make superbosses so successful in the United States also translate to other setting,” he says.

Sydney Finkelstein

Tyre Asia October/November 2017

“In a culture where the superbosses’ mindset might be less well distributed, those leaders and companies who can embrace and execute on a superboss culture will have a competitive advantage,” he said referring to Ratan Naval Tata, who worked within the Tata Group from 1961 to 2012 and was at its helm from 1991 to 2012. He still serves as an adviser to Tata and is India’s foremost angel investor.

Superbosses have the ability to spot talent and nurture them under their wings. They know that the only way to win and survive as an organisation over the long term, is to generate and regenerate talent on a continuous basis. It is the single best thing to avert failure.

Superstar talent Prof Finkelstein’s research has revealed that in each enterprise there are one or two people who have had an outsized influence on the development of superstar talent. They actually do things that are incredibly similar that are actually teachable. They develop counterintuitive ideas on how to identify, motivate, inspire, and leverage talent. “Superbosses have resurrected the old masterapprentice relationship that most associate with the training of craftsmen in the Middle Ages. But it turns out that working closely with a superboss is one of the best ways to turbocharge your career.”

Under his leadership, the Tata Group grew immensely, restructured to become more uniform and efficient, dramatically increased profits, strengthened its already-considerable commitment to corporate social responsibility, globalised, and yielded a team of leaders to carry the group into the future upon his retirement. The Tata Group includes 98 companies operating in dozens of industries, and most of his protégés have stayed within the group. However, these protégés move around within

uperbosses are geniuses at helping others accomplish more than they ever thought possible. This is not “teambuilding” or “mentoring”, but something much more, much deeper, that changes protégés from talented apprentices to stars and superstars in their own right the group, demonstrating their versatility as managers. These protégés have led their respective divisions of the Tata Group to spectacular success. Commenting on the traits of superbosses, Prof Finkelstein affirms that they are geniuses at helping others accomplish more than they ever thought possible. This is not “team-building” or “mentoring”, but something much more, much deeper, that changes protégés from talented apprentices to stars and superstars in their own right.

Superbosses do not get upset when their protégé leaves because they are positive that their reputation for producing talent would only grow further, and they become talent magnets. “Nobody gets stale, and you become the employer of choice for new blood who know that you’re the person to work for if you want to accelerate your career,” he remarks. “I’d love to see people learn from superbosses, adopt superboss practices, and teach them to the people around them. It’s a formula for business success as much as it is about leadership,” he says. “They push you, challenge you, engage you, give you a chance to have a big impact on what is happening at your organisation. Especially for millennials, but for everyone, superbosses help make work meaningful again.” When asked how job seekers could identify superbosses, Prof Finkelstein said they have key markers such as their ability to work hand-inhand with subordinates and create opportunities for protégés to learn. They strongly encourage collegiality even as they simultaneously drive internal competition. They value talent and creativity over stability of staff. Superbosses are igniters of talent. Over time protégés of superbosses become among the most successful in their industries, and are duly compensated for it. They are endowed with the ability of communication, authenticity and originality. “If you can combine these three elements into your purpose, people will fall over themselves trying to work for you,” said Prof Finkelstein. Like Tata, superbosses have a compelling vision and they emphasise the importance of talented teams. What he has done is to establish growth mechanism, play down individuals and play up the team that has made his companies valuable winning respect for the company and its ethical practices. Tyre Asia October/November 2017

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RUBBER

Impending threats from alternatives An Indian researcher on rubber economy says the country is not prepared to face the market challenges posed by the natural rubber alternatives to Hevea brasiliensis. Globally – in particular in the United States and Europe – serious efforts are on to commercially produce NR from Parthenium argentatum (guayule) and Taraxacum kok-saghyz (Russian dandelion). While industrialised countries depend on Hevea grown exclusively in tropical countries, there is awareness that total dependence on such strategic material would undermine the interest of the importing countries. It is in this context that rapid advancements in the commercialisation of alternatives are progressing there. India, a major Hevea rubber producing country, is doing precious little to take on the challenges when competitive NR substitutes flood the global market, says Dr PK Viswanathan, Professor of Economics and Sustainability at the Kochi (India)-based Amrita University’s Department of Management Dr PK Viswanathan

TA News Bureau

he question on alternatives to natural rubber (NR) is quite an interesting area of inquiry, which is still under infancy, despite several efforts that had been made earlier. Undoubtedly, NR is the unique renewable resource of nature, as rubber plantations are replenished in a cycle of 20-25 years. Though rubber has been found in the latex of over 2000 species of plants, Hevea brasiliensis remains the most important commercial source of natural rubber for reasons of high yield and low impurities. Given that the Indian rubber industry is dominated by the tyre manufacturing sector with a steady dependence on the NR content in its production process,

Tyre Asia October/November 2017

the NR sector would continue to play a major role in sustaining the future of the industry. With EU tyre labelling becoming effective, there is a perception that the price of NR would go up from the current levels as there is no better substitute for rubber derived from Hevea brasiliensis for manufacturing passenger and light truck tyres. That said, reports also reveal that the American and European tyre companies are increasingly experimenting with non-Hevea rubber, such as the Russian dandelions and guayule. However, it is still a matter of debate whether guayule would make a detrimental impact on the NR in the near future.

Seemingly, though the alternatives to NR and synthetic rubber (SR) would provide useful avenues for research, it will remain a niche area with minimal scale of R&D attracting the same. “In the emerging context when India’s NR sector is beset with major constraints affecting its competitive edge, I feel that the country’s capabilities to take on the challenges in the global NR market are very much limited,” says Dr PK Viswanathan, , Professor of Economics and Sustainability at the Kochi (India)-based Amrita University’s Department of Management. “One of the important reasons for

Guayule concept tyre from Cooper Tires (Photo courtesy: www.tractionnews.com)

this is the structure of the industry characterised by near monopoly of the tyre industry with limited scope for the dominant small and marginal producers becoming the major stakeholders having a stake in determining the future of the industry,” says he. He, therefore suggests, that the stake of the small producers should be enhanced through increased opportunities for value added product manufacturing. There should be a deliberate and strategic switch over to production of technically specified higher grades of rubber as happened in countries, such as Thailand and Malaysia. “In a global context where efforts are made on reducing the ecological and environmental footprint by way of containing the degradation of natural resources and levels of greenhouse gas emissions, NR would continue to have the strategic and comparative edge over SR, he says. The energy and cost intensity as well as pollution risks involved in the production of SR also give NR the much coveted credence as the sustainable raw material for the future.

Multifaceted challenges That said, the sustainable future of the Indian rubber industry would call for concerted efforts on the part

he stake of the small producers should be enhanced through increased opportunities for value added product manufacturing. There should be a deliberate and strategic switch over to production of technically specified higher grades of rubber as happened in countries, such as Thailand and Malaysia

regime followed by the country since the beginning of the planning era. The crisis in NR price in recent years pose severe constraints on the viability and sustenance of rubber cultivation as well as cause adverse effects on the adoption of improved agro-management practices by the small growers in India. “At the same time, promoting rubber as a monoculture as it is done today will have greater consequences to agri-biodiversity as well as ecosystems in rubber growing regions in India, especially Kerala,” he says. This southern-most state produces almost 90 per cent of India’s NR output.

of the state as well as the industry to come together and address the multifaceted challenges confronting the sector by way of external market and trade risks as well as the internal production risks in the face of increasing shortage of skilled rubber tappers as well as the climate change induced losses in yield, asserts Dr Viswanathan.

While there has not been any serious attempt from the stateowned Rubber Board to address this issue in terms of understanding the implications of this model of rubber development, it becomes quite essential in the emerging context that rubber be promoted as a cropping system with proper integration of food crops or vegetable crops, especially in the North East region and other new rubber growing states.

The volatility in rubber prices especially in India’s post-economic reforms period is a matter of serious concern given the fact that this period also coincided with the phasing out of the protected price

Such initiatives will have long-term positive benefit with respect to food security along with ecosystem integrity as well as a balancing effect against price risks of NR, Dr Viswanathan said. Tyre Asia October/November 2017

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Rousing response to RubberTech China By Venugopal P

he 17th International Exhibition of Rubber Technology (RubberTech China 2017) and the concurrent International Exhibition on Tire and Aftermarket 2017 Expo (Tire+ Expo) which concluded at the Shanghai New International Expo Center, Shanghai, on September 22, 2017, were a resounding success, with over 600 exhibitors, 30,000 plus visitors and an exhibiting area of 40,000 sqm. The exhibitors from 30 countries and regions brought their latest products and technology of rubber and tyre industry including NR, SR, rubber compound, rubber products, rubber chemicals, framework materials, rubber machinery, elastomers, carbon black, reclaimed rubber, auto parts and garage facility.

Tyre Asia October/November 2017

Organised jointly by the China Rubber Industry Association (CRIA) and China United Rubber Corporation (CURC), RubberTech China attracted worldâ&#x20AC;&#x2122;s leading manufacturers and suppliers of rubber machinery, rubber chemicals, rubber raw materials, rubber products etc. The exhibits were grouped under various product categories such as Rubber Machinery, Rubber Chemicals, Rubber & Framework Material and Non-tyre Rubber Products. The big names in the industry represented at the show included VMI, Mesnac, Strucktol Schill Seilacher, ARLANXEO, TST, Altracon S.A., BST International (Shanghai) Co. Ltd., China Hainan Rubber Industry Group, Hankook TRS Co.Ltd., Kenda Rubber (China) Co.Ltd. Mitsubishi Heavy

Industries (Changshu) Machinery Ltd., OCSIAL Trading (Shenzhen) Co.Ltd., Rhein Chemie (Qingdao) Ltd., Rubber Division, ACS, SafeRun Machinery , Samson Machinery, SIBUR Holding, SI Group, Versalis S.p.a. Many companies showcased their innovative products and new technological developments at the expo. ARLANXEO, the world-leading synthetic rubber company, presented key products of its comprehensive portfolio, including new grades such as Keltan 5467C and Buna FX, demonstrating the companyâ&#x20AC;&#x2122;s leading technological developments and excellent product quality in the synthetic rubber industry. Says Ma Junhua, CEO of CURC:

“Riding on the experience of more than 20 years of industry exploration and the success on the organization of Asian Essen Tire Show (Reifen China) and the International Exhibition on Rubber Technology (RubberTech China), CURC has partnered with CRIA to bring to participants an ideal event for business opportunities and information exchange. Tire+ maximizes the possibilities for brand promotion through our show platform and take advantage of the crossindustry attendees.”

Tire+ Expo The International Exhibition on Tire and Aftermarket 2017 Expo (Tire+ Expo), the new version of Reifen China, took place concurrently with RubberTech China at the same venue. Reifen China had been organised previously by Messe Essen in partnership with China United Rubber Company (CURC); but after Messe Essen licensed the Reifen China name to Messe Frankfurt, who in turn have opted to use the brand on a tyre pavilion within the large Automechanika Shanghai event, CURC decided to go it alone and produce a new show – Tire+ Expo. The inaugural Tire+ expo made its debut with an opening parade of the CEOs of the top 12 Chinese tyre manufacturers. The only CRIAsupported tyre and wheel rim show in China to date, Tire + was attended by outstanding enterprises with global influence in the tyre, wheel rim and after-market industries. The exhibition involved globally top

75 tyre manufacturers (including foreign and joint venture companies, domestic enterprises, Chinese labelled manufacturers), global tyre dealers, chain store owners, selfmanaged retailers, E-commerce platforms, workshop suppliers, tyre proving ground owners and other representatives of the automotive aftermarket industry.

Rubber Co. Ltd.

The tyre majors exhibited at the event included China National Tire & Rubber Corp, Double Coin Holdings Ltd., Doublestar Tire, Shandong Yinbao Tyre Group Co. Ltd., Shandog Linglong Tyre Co. Ltd., Qingdao Sentury Tire Ltd., Z C Rubber, Linglong Tire, Wanli Tire, Prinx Chengshan (Shandong) Tire Company Ltd., Zhongce Rubber Group Co. Ltd., Sailun Jinyu Group, Triangle Tyre Co. Ltd., Guizhou Tyre Co. Ltd., Shandong Wanda Boto Tyre Co. Ltd., Kenda Tire, Triangle Tyre, Sinoarp, and Shaanxi Yanchang Petroleum Group

Commenting on the inaugural Tire+, Xu Wenying, General Secretary of CRIA, says: “CRIA is appealing to foster a closer relationship between the tyre and after-market industry while connecting and strengthening businesses and recognition of the Chinese national tyre brands. Excellent national enterprises have social responsibility as well as strengths for the rise and booming of the tyre industry and that is why we set up an organizing committee for Tire+ so as to facilitate a healthy ecosystem within the tyre industry.”

Tire + showcased several topics, including Chinese tyre labeling, China tyre safety week, and a future tyre display. Panels discussed the role of tyres in the OEM market, distribution channels, replacing aftermarket, consumer buying behaviours and after-sales maintenance.

Tyre Asia October/November 2017

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COVER STORY

Winner From The Start Over a short period of time since its establishment Shandong Fengyuan Tire Manufacturing Company has grown to become a winning example of China’s new generation tyre companies. Committed to quality through innovation, it already has won the description “The New Dark Horse” in the country’s tyre industry

TA News Bureau

handong Fengyuan Tire Manufacturing Co., Ltd. is located in Yicheng Economic Development Zone, Zaozhuang City, Shandong Province. It is close to BeijingTaiwan Expressway, Beijing-Shanghai high-speed rail, Zaolin Expressway, Qingdao Port and Rizhao Port. The project is owned by Shandong Energy (Among the world’s top 500) enterprise Zaozhuang mining group, and is a state-owned holding. The project planning is for an annual output of 20 million semi-steel radial tyres through research and development, manufacturing and sales marketing. Targeting high-end products the company has adopted the technology, and equipment from global leaders like the Netherland-based VMI’s EXXIUM - a molding machine, the Italian steel wire calender, the German Terraz four composite and

Tyre Asia October/November 2017

other international advanced equipment and has built a world-class semi-steel tyre production line. Using the world’s advanced tyre manufacturing synchronization technology combined with finite element autonomous noise analysis, independent research and development production of low roll resistance, low noise, safe and environmentally friendly green tyres. Production and sales doubled year after year, with an annual output of 10 million high-performance semi-steel radial tire production capacity, the company is 39th among Chinese tyre enterprises in 2017. This has prompted Fengyuan Tire to be called “the new dark horse.”

Products The company has HP, UHP, C-type light truck, SUV, snow tyres, drift tyres and other 23 series.

Tyre Asia October/November 2017

COVER STORY

There are more than 800 specifications of products that adhere to the European tyre label regulations in performance and quality. It has received ISO / TS16949, ISO14001, OHSAS18001 , ISO / IEC17025 accreditation certificates, through the DOT, ECE, GCC, inmetro, CCC mandatory certification, the first batch of China’s tyre label and China’s green tyre certification, the first batch of “same line with the same quality” that is the first batch Access to national low-carbon product certification of enterprises. The “Farroad” brand was rated as well-known trademark in Shandong Province. The focus is on achieving international quality reputation. It won the 2017 China Rubber Industry Association recommendation for brand products. It is among the top 10 brands of China Snow tyres. Fengyuan Tire products are exported to Europe, the Americas, and more than 100 countries and regions. Its brands like Brilliance, Zhongtai, Jiangling and Changan are among top products for new generation vehicles and new energy vehicle suppliers.

New products, new technology Fengyuan Tire pays attention to technological innovation. The low temperature single-stage rubber mixing technology was authenticated by the

national institute of chemical industry of science and technology. Its carbon nano tubes tyre application has won appraisal from the National Petrochemical Federation of Science and Technology. Both of the above technologies have reached international advanced level and laid the company’s leading status in tyre industry. Low temperature single-stage rubber mixing technology project was started in November 2013, and was completed in January 2016 successfully. The system is a continuous and intelligent rubber mixing production assembly line, the whole process of rubber mixing closed-loop fully automatic seamless and formed the detection closed-loop, combined with the concept of environmental protection intelligent, add rubber oil purification technology, new solid material application, all these factors make low temperature rubber refining production technology process intelligent operation, stable and efficient environmental protection production.

Carbon nanotube tyre Shandong Fengyuan Tire is the first to come up with the concept of carbon nanotube anti-static tyre, and start mass production. According to the test by a third professional party, carbon nanotube tire is much better than normal ones on electric conduction, mechanics and heat conduction. Its volume resistivity is at least 5 orders of magnitude lower, effectively avoid the negative influence caused by static, prevent fire and car spontaneous combustion, and improve the control and braking capability on wet and dry land, which provide safe, quiet and comfortable experience. Fengyuan Tire company develops “triple-protection tyre”: anti-blast, anti-air-leaking, anti-static. Compared with traditional tyre, carbon nanotube tyre is applied with special strengthening technology. Even if damaged, this tyre still can keep some running by its good supporting performance. There is an additional anti-blast ply in it, whose puncture resistance performance is good, effectively preventing air leaking caused by puncture. Carbon nanotube tyre is good at static conductive. Tyre

Tyre Asia October/November 2017

resistivity is 3 orders of magnitude lower than international standard, which can release the static gathered on cars, achieve the aim of tyre comprehensive security. Fengyuan Tire company always insists producing high quality products, and establishing high level brand development orientation. It has launched a lot of high-tech new products: all climate tyre, studded snow tyre, white ring tyre, colorful letter tyre, drifting tire. They can satisfy different demand of different markets, provide comfortable driving experience for consumers.

Technology and equipment Fengyuan tire is equipped with the Netherlands VMI-EXXIUM unmanned molding machine, Italy wire calender, Germany Terres four production lines, South Koreaâ&#x20AC;&#x2122;s East River vulcanizing machine and other world-class semi-steel tyre production lines. It has built the international advanced low-temperature one time law refining production line and rolling production line, high-precision oblique cut production line, automated molding production line, high temperature nitrogen vulcanization production line, fully automated detection line and intelligent three-dimensional warehousing distribution center, building MES and ERP information management systems, company equipment and industrial information level in the forefront of the industry. In 2016 the scientific research and technology investment was of more than 3,000 million. The more than 10,000 square meters of provincial-level

technology center was built and an R&D team comprising international advanced design technology professionals was introduced. There was also the construction of more than 3,000 square meters of physical and chemical laboratories equipped with German SDS laser interferometer, Japanese dynamic balance uniformity testing machine, American Alfa Menny, rheometer and other international advanced research and development, laboratory equipment. In addition, the introduction of finite element analysis Law for independent noise analysis, innovation and development of low-rolling, low noise, green highend tyre products has also been done.

Quality certification Fengyuan Tire adheres to the quality first. The company took the lead in the implementation of the chief quality officer system, the implementation of full quality management, the introduction of â&#x20AC;&#x153;the whole process can be traced backâ&#x20AC;? of the Internet of things model, innovative use of industry-leading one thousand forty four production testing process and the whole industry chain quality control means, import high performance management model,

Wang Zhongjiang, Chairman, Fengyuan Tire with colleagues

Tyre Asia October/November 2017

COVER STORY

Into the international standard system, the whole process of quality control level to achieve advanced standards. Product performance has been widely recognized by the industry, is the first batch of national exports of tire quality technology to promote the Committee, “the same line with the same quality” identified tire companies, access to the ISO / TS16949 automotive safety management system, ISO14001 environmental management system, OHSAS18001 occupational health and safety management System, CNAS national laboratory certification equivalent to ISO / IEC17025 certification, through the United States DOT, Europe ECE, Gulf GCC, ASO (Saudi Arabia), SONCAP (Nigeria), Brazil INMETRO, China CCC compulsory certification, the first through the China Tire Tag review and China Green Tire Certification.

Company Scale Fengyuan Tire has the production capacity 10 million pcs in the year 2015, In 2017, the production capacity is 23000 pcs one day. At present, the tires sell to more than 100 countries and areas, export amount is 80%, Europe and the United States etc is for 55%, Production and sales maintain high speed growth, the growth rate is more than 70% annual average, Create a new pace of development of the industry, called “Fengyuan tire phenomenon.” by industry. The company is one of the first batch of enterprises in the tire industry of the Ministry of Industry and Information, one of the top 50 rubber enterprises in Shandong Province in 2016, the 39th of China’s tire enterprises in 2017, and 30 leading industrial enterprises in Zaozhuang City, which was selected as high-tech enterprise by Shandong Science and Technology Department. In the current trend of change from information age to the intelligence age, we have built a production and marketing integration ERP system, production MES system, the market Haiyi system, and the advanced automatic 3D warehouse and mold storehouse, Company information and industrialization of highly integrated, which was listed as a national level of two integration management system pilot enterprise.

Talent Fengyuan Tire develops “Mengchang home” talent accumulation project, through the channels of recruitment and introduction, has absorbed more than 500 professional training talents. Developed “three channels” and “three batches” construction, Cooperates with Qingdao University of Science and Technology, and South China University of Technology. Set up talent practice base, build a cradle of talent growth. Established balance mechanism. Implemented special subsidy system for

Tyre Asia October/November 2017

professional technical talents. Fengyuan Tire is the first company in the industry that has rubber machines, rubber elites and Qilu Friendship Awards. Chief Engineer Luo Jiliang won the province of enterprise talent development support project funds and rubber hundred years elite award, technical consultant Li Hanqing won the “Qilu Friendship Award” of the year 2016, executive vice president Du Yunfeng won the first rubber industry elite award of the year 2016. At the same time also introduced the Taishan scholar Dr. Li Hongwei and the Council grant winner Dr. Yang Wenjun in Qingdao University of Science and Technology State, Dr. Zhu Jiashun, Dr. Sun Hongguang 8 high-end technical talents. Talent growth provides a strong guarantee for the enterprise innovation and development.

Culture Fengyuan Tire positively constructs the enterprise culture system. In the initial

recombination, it put forward Four “Everything” (everything should have the standard; Plan ahead and prepare for it. Be patient and persevering in everything; Always keep the attitude of the coordination) and “Four First” (safety, quality , client , system ), take the enterprise culture as the lead, gather people and form cohesion. The company has come up with “five spirits” with the combination of local culture, promoted “innovative spirit of XiZhong (who invented the wooden vehicle) “ “craftsman spirit of Luban” “spirit of assiduous study of Kuangheng “ spirit of talents of Mengchangjun “ and “perseverance spirit of Pteroceltis tatarinowii Maxim “to motivate employees through excellent culture.

Capital operation After three years of high quality development, the company has made outstanding achievements, but the pace of innovation of Fengyuan Tire has not stopped. The company actively promotes advanced technology cooperation and capital

Tyre Asia October/November 2017

COVER STORY operation, avoids trade barriers and expands domestic and overseas markets. With the help of the national supply, under the background of innovation, company actively responds to the national “One Belt And One Road” strategy, relying on the powerful support of Shandong Energy Group (The world’s top 500, ranked 372). It has accelerated the construction of Thailand rubber processing base, carbon black, steel cord, PCR, TBR, rubber belt, logistics trade in one integrated chain industry pattern. In order to achieve value-added and profitable growth, company takes advantage of the development platform for rubber, explores the capital operation of M&A, restructuring and union, implements the “going out” strategy layout and accelerates business expansion. In order to achieve value-added and profitable growth, company takes advantage of the development platform for rubber, explores the capital operation of M&A, restructuring and union, implements the “going out” strategy layout and accelerates business expansion. Fengyuan Tire will be listed on the new third board by the end of 2017. By IPO, company can increase financing channels and expand development space. Expand brand influence and improve credit rating; Enhance capital strength and accelerate enterprise development; Standardize corporate governance and improve management efficiency; There are many benefits such as rotary board mechanism, which can make the company leap forward.

Development project and vision Fengyuan Tire has opened the 2nd 3-year developing journey, making expansion, raising the quality, promoting the benefit, turning the good enterprise to the excellent one. Production building: Holding the MES and the ERP system; Building the TMP facility management system; Keeping towards elaborate manufacturing; Accelerating production accomplishment and efficiency; Making the achievement of safe, effective

Tyre Asia October/November 2017

and high-quality manufacturing; Starting the Phrase 2 project of 10 million pieces annual production capacity in the right time; Carrying out the complete mode and expand the enterprise scale Marketing and sales: Insisting on the method of scale expanding in overseas market, brand creating in domestic market, image building in original equipment market; Oversea market focusing on direct distribution channel, domestic market focusing on prefecture-level city wholesalers, original market focusing on traditional automobile plants and new energy automobile plants, regional distribution channel focusing on group key accounts; Heading for medium and premium market both in domestic and oversea market step for step, raising the enterprise earning power signally; Research and development: Aiming to premium and medium automobile after market, creating first class in domestic market and advanced in global market tire R & D enterprise; Brand building: Growing into a well-known brand in tyre industry in 2017, into a consumer focusing brand in 2018, into a leading brand in 2019; Building a well-known brand in Shandong and China, from a potential brand to brand that recognized by consumers both from domestic and oversea market. Attracting talents: Carrying out â&#x20AC;&#x153;Mengchang Hometownâ&#x20AC;? talents attracting project, collecting kinds of talents with a common goal, thinking much of practice, based on the way of strengthening the enterprise by talents; Cooperating with universities and scientific research institutions, cultivating high-grade professional talents; Building training specialist system and training base, combining staff self-learning with training base, building scientific and reasonable talent selection system. Enterprise culture: Keeping advantage in

culture, deeply focusing on culture construction, accumulating the connotation of Fengyuan Tire culture; Utilizing traditional and modern media, spreading and establishing enterprise culture in multi-way and multi method, forming new cultural system of public listed company, creating Fengyuan Tire special enterprise culture of innovation integrity and standard. Capital operation: Going public listed in new 3 board in 2017, arranging main board listing in 2019, accelerating the opening up development strategy, Carrying out multi capital operation, optimising allocation of resources, expanding new development space constantly; Fengyuan Tire will take the responsibility of high quality forever and will make innovation constantly. In the future, we will be responsible for consumers and market as always, construct world first class tire manufacturer with the spirit of innovation and excellent technology, try to create a Chinese tire new generation. Tyre Asia October/November 2017

COVER STORY

Driven by Spirit of Innovation Fengyuan Tire has adopted innovation as the driving force for company development and our goal is to be the top brand in China and abroad with top quality products, says Wang Zhongjiang, Chairman of Shandong Fengyuan Tire

TA News Bureau

ang Zhongjiang, Chairman of Shandong Fengyuan Tire, is a member of the Communist Party of China. He graduated from China University of Mining and Technology, majoring in Executive Master of Business Administration with a master’s degree from University of Qingdao Science & Technology, senior engineer. He is the first manager with double Masters degrees in the Group. Zhongjiang has held the posts of construction project director and vice-general manager of Shandong Bayi Tyre Manufacture Co., Ltd. from 2003 to 2013. He has been the secretary of the Party Committee of Bayi Rubber Co., Ltd. and general manager of Shandong Fengyuan Tire Manufacturing Co., Ltd. from 2014. He has played a key role during the development of the company. He rebuilt Fengyuan Tire and has served as general manager of the company, chairman and party secretary. He has excellent work experience and management ability and also has a strong sense of innovation and brand awareness. He improved and enhanced the comprehensive strength of Fengyuan Tire and strengthened its brand value, leading the company to greater heights. Excerpts from the interview

After achieving the landmark capacity target of 10 million semi-steel PCR radial tyres in 2015 what is your next target? In the high-end development orientation, Fengyuan Tire insists on brand image. We have established high quality products to build high level brand, put in the market equipment, technology, and quality onto highend position. We will highlight the “green, safe, energy saving, environmental protection” features to create the unique and scientific path of development.

Please elaborate on the technology adaptation at Shandong Fengyuan Tire. What kind of equipment do you use to make high quality tyres? Fengyuan has created many “No.1s” in the tyre industry. We have adopted the latest generation of lowtemperature method of refining technology and have achieved advanced international levels. We are the first one to achieve the mass production of carbon nanotubes material in the tyre. - The first to propose carbon nano-tubes anti-static concept, and the formation of mass production; - The first one to introduce the most advanced VMI –EXXIUM single-stage building machine, German Troester Quadruple Extruders, Italian double calender machine, German Fischer steel cord cutting equipment, and the advanced Korean Dong-Hua Hydraulic Curing machine.

Wang Zhongjiang

Tyre Asia October/November 2017

- The most advanced testing machine, the Japan dynamic balance and uniformity machine, German X-ray machine, the German laser bubble inspection machine, American Alfa tension machine, integrated testing machine, the first one to use rubber flow detector and rubber surface adhesive teste, and participated to develop the standard of the two machines.

- Fengyuan is the first group company who was certified with green label - National Ministry of Industry and Information Technology access enterprises - The first company doing research on comprehensive safe tyre - the pioneer company producing big size snow tyre in large quantity - the pioneer company of rubber machine, high technology to win Qilu friendship prize. - Pioneered the integration of IT application with industrialization. - The first company passing the Second Grade Safety Inspection Standard - The pioneering company of mixed ownership reform of state-owned enterprises

Please elaborate on your quality enhancing efforts Quality: Fengyuan puts more emphasis on quality than brand to ensure production pass rate up to 99.6%. To keep quality our top priority we introduced Chief Quality Officer position to supervise the quality system. At the same time, put great focus on tech-guided, programming oriented and quality supervision. We offered a comprehensive training system and quality management system. We also try to create a quality focused environment by engaging in activities organized by China Quality Association. Fengyuan was awarded more than 10 rewards in China for its fast growing outlook and products quality Innovation: A good innovation system is the driving

force of the company’s fast growth. In 2015, 256 workers were selected from company to form an innovation team. A check-and-balance system is also created by Fenyuan, which rewards those innovative performaers and punish those who are irresponsible. In 2016, we collected 2360 advices which translated to 11 million RMB revenue. In 2017, we aim to apply for more than 100 patents and to be top 10 of Chinese tyre industry within two years’ time. During the year of 2017, we got the second place for innovation items at provincial level, and the 21th place of 35 patents, and published 29 articles in national level magazine. Innovation is the driving force for company’s development, innovation comes from talents which we work hard to nourish and make innovation our company culture.

What about your development planning and vision? Fengyuan Tire adheres to high level growth plans. Our focus is on building consumer recognition tire brand. At present, the company has Farroad, Saferich and other tire brands, which are accepted and has satisfied the market. We will gradually build first-class brands in the next three years. In 2017 we made some of the industry’s well-known brands. Our aim is to become the main brand in the market in 2018, and to become the market’s leading brand in 2019. We are striving to be China’s most well-known tyre brand, the industry’s most potential brand for domestic and foreign consumers. Fengyuan Tire will always adhere to pioneering innovation through increasing investment to enhance competitiveness, with a global perspective to build the domestic first-class enterprises and to create world famous brands. Tyre Asia October/November 2017

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Technology

Ready with alternative TA News Bureau

hen Daniel R Swiger founded Yulex Corporation and now Kultevat Inc, he was very clear about the need to produce economically viable alternatives to natural rubber from Hevea brasiliensis. One reason is the allergy that could be triggered by using latex gloves, condoms or other natural rubber products made from Hevea. The allergy symptoms range from rashes and hives to life-threatening anaphylactic shock.

Daniel R Swiger

In 1995 Daniel R Swiger founded Yulex Corporation, a venture-backed company to commercialise guayule, an alternative to Hevea rubber crop. He did not stop there. His foresight to develop other environmentally-friendly and sustainable rubber took him to seize the challenge to commercialise Taraxacum koksaghyz or Russian dandelion as a source of good, high molecular weight rubber. He founded US biotechnology company Kultevat Inc to produce rubber from dandelion in North America and then expand that model in other parts of the world. He thinks that the near-total dependence on natural rubber produced is Asia is not desirable as leaf blight could wipe out plantations that produce this strategic material. It is indeed imperative to require a domestic source of natural rubber on which Kultevat Inc is investing its resources for processes and technology 56

Tyre Asia October/November 2017

The other reason is the global economic disaster that could happen if leaf blight were to hit Hevea grown in Asia, which is the source for over 93 per cent of the world’s natural rubber. It is, therefore, imperative that the world should ensure the availability of regular supplies of alternatives to Hevea rubber. While searching for the best alternative to Hevea rubber, Swiger turned his attention from guayule to Russian dandelion. He invested in research to develop commercially suitable natural rubber from dandelion. He has now succeeded in commercially producing the highest quality of natural rubber with the highest molecular weight that is currently available on the market. In an interview to Tyre Asia, he spoke of his technology and marketing vision that prompted him to first set up Yulex and the need to develop another source of natural rubber that does not have the problems of allergens that Hevea rubber has. “Our initial market was healthcare professionals who routinely wore gloves as protection against AIDS and other infectious diseases,” he recalled. It was estimated that at least 20 million Americans suffered from latex allergies that could be triggered by using latex gloves, condoms or other natural rubber products made from Hevea. Allergy symptoms ranged from rashes and hives to life-threatening anaphylactic shock. Products manufactured from guayule would offer a safe alternative for Hevea allergy sufferers and protect future generations from allergic reactions to latex. Swiger left Yulex to set up US biotechnology company Kultevat Inc where he pushed for research and technology to produce natural rubber

alternatives from dandelion that is environmentally friendly and sustainable. He combined genetic breeding and chemical process engineering to produce natural rubber from Taraxacum koksaghyz or “TKS” in North America and then expand that model to other parts of the world. Kultevat serves to reduce near-total dependence on foreign sources of rubber globally. “We need a domestic source of natural rubber,” Swiger said. “Kultevat’s TKS is the highest quality of natural rubber on the market with the highest molecular weight. He believed that large-scale production of guayule latex was feasible and its commercialisation would directly address the problem of Hevea-latex allergies in

Dandelion

the healthcare market. “However, guayule is not economically feasible to compete in the global bulk rubber market,” Swiger affirms. NR is so important that the world can’t afford to limit its production to one plant in one part of the world, according to Swiger. One of these days, leaf blight is going to hit Hevea again just like it did in Brazil years ago. Experts know it is going to happen; the real question is when? From his experience with Yulex, Swiger expanded his vision and determination to set up Kultevat for the commercialisation of industry relevant dandelion varieties. The company is poised to offer high quality TKS rubber in commercial amounts. It is now growing TKS in multi-states, and has patented several extraction processes and a capital efficient, bolt on manufacturing plan, he said “Our customers are rubber manufactures who are dissatisfied with their current rubber suppliers due to shortages, labour

S biotechnology company Kultevat Inc was founded to push for research and technology to produce natural rubber alternatives from dandelion that is environmentally friendly and sustainable. It combined genetic breeding and chemical process engineering to produce natural rubber from Taraxacum koksaghyz or “TKS” in North America and then expand that model to other parts of the world

and transportation cost and a material that is controlled by the rubber producing countries,” he said and added: “Kultevat’s natural rubber is to the rubber industry what the pacemaker is to humans…” Remarks Swiger: “We help control (cost, supply, physical and chemical properties) and eventually Kultevat’s rubber will become just like a total heart transplant, because the customer conditions haven’t improved sufficiently with their current rubber supplier.” If you can control the raw material, quality and price of a domestic rubber the way we are, that doesn’t have shortages, price fixing or controlled by rubber producing countries, then thousands of customers who do experience this will want to buy our material.

Competitive product Kultevat’s TKS will out-compete all other rubber crops, providing end-use markets with a stable, long-term supply of highest quality natural rubber. TKS can be grown faster, over a broader geographic and climate range, and can be improved by plant breeding more quickly than other rubber-bearing crops. Moreover, harvesting can be easily mechanized and processed requiring less capital than other rubber bearing plants.

Commenting on the reason why he switched his attention from guayule to dandelion, Swiger has reasons to weigh each kind of natural rubber in terms of relevance and price. Unlike Hevea rubber trees and guayule, TKS can be grown in temperate regions around the globe, including in North America. “Kultevat’s goals include increasing the yield of rubber from cultivation of highly productive varieties of TKS in multiple locations in North America, and developing green technologies for extraction of product from plant tissues,” Swiger explains. Kultevat’s commercialisation strategy calls for the company to sell into specialty rubber markets at the outset while it continues working with R&D partners to develop products for their purposes. It is engaged with a number of strategic partners/customers and it is currently growing TKS for processing, rubber for processing and scale purposes. “We’re seven year ahead on plant breeding and about 10 years ahead of everyone else on processing,” Swiger asserts. Kultevat’s technology platform converts Continued on page 86 Tyre Asia October/November 2017

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Technology

Guayule can turn Thar desert green

Dr Shashi Kumar

India’s Thar Desert, the world’s ninth largest subtropical desert, can be turned green by commercial cultivation of guayule to produce industrial scale natural rubber as a supplementary to Hevea rubber. Dr Shashi Kumar, Leader, Metabolic Engineering Group at the Delhi-based International Centre for Genetic Engineering and Biotechnology (ICGEB) says this will not only enhance farmers’ incomes but also counter migration to cities in search of livelihood. The biotechnologist, who has several patents to his credit, has done considerable research in plant genetic transformation that can help produce more latex from guayule. In an interview to Tyre Asia he said the genetic approach his team has developed could substantially improve latex yields in rubber trees as well. TA News Bureau

he international press chased Dr Shashi Kumar and headlined his biotechnology inventions when he developed through biosynthesis of tobacco artemisinin, considered the most effective treatment against malaria, the most infectious disease that kills every year two million people, mainly children. The method he developed was to orally administer whole plant cells generated from double transgenic plant lines. His genetic knowledge and research skills have also been directed to improve the latex yield from guayule as he finds it supplementary to the rubber produced from Hevea brasiliensis. While the latter can grow only humid tropical zones, guayule is a semi-desert plant that can thrive well in the Thar desert. “While Hevea brasiliensis can flourish in the dense tropical rainforest conditions, guayule can be home for the Thar desert of India,” he said an interview to Tyre Asia. “So the plantation is not competitive but supplementary to each other as well. Both species thrive in different regions and may be used for different applications.” The guayule latex could be used for products for medical applications (heart valves etc.) and condoms, especially for those who suffer from the type-1 latex allergy. The Hevea latex is suitable for heavy duty commercial products, including tyres while guayule has the potential to become an important cash crop in Thar desert

Tyre Asia October/November 2017

for medical usage since clinical studies have shown that Hevea brasiliensis latex antibodies does not react with guayule latex; thus, guayule provides an alternative source of rubber products for using those who has hypersensitivity with Hevea latex, he points out. As a large part of the Thar is not suited for conventional crops, this lacuna can be filled by guayule cultivation so that farmers’ income would substantially increase. This new agriculture practice would also counter the migration crises to the cities. “Therefore, the central and Rajasthan governments should initiate further research and development programme on guayule as that could open the door for the commercialisation of this important crop in the Thar desert,” he says. Dr Kumar was able to substantially improve the latex yield by two to four folds through the genetic technique of over-expression of IPP (isoprenoid) pathway of yeast into the rubber tree or guayule. He has been granted a US patent for engineering rubber production in plants, among other things. In his present job at ICGEB, he has developed many patented technologies that are ready for commercial transfer: Engineering rubber production in plants; Super genetically engineered marine algal strain; Carbon concentration mechanism in micro-algal species

to increase production of lipids to obtain bio-fuel; Generation of double transgenic plant lines for anti-malarial drug artemisinin biosynthesis in tobacco for effective treatment by oral delivery of whole plant cells.

Current research Elaborating on his current research on development of callus transformation system for guayule, Dr Kumar explained that callus is a mass or clump of single cells. Each cell has a totipotency (the ability of a single cell to divide and produce all of the differentiated cells in an organism) to convert itself in the form of plantlet under the influence of specific plant growth regulators, also called plant hormones.

s a large part of the Thar is not suited for conventional crops, this lacuna can be filled by guayule cultivation so that farmers’ income would substantially increase. This new agriculture practice would also counter the migration crises to the cities

“In our study, guayule callus was produced using plant hormones, which was used for the genetic transformation with the help of agrobacterium strain. The agrobacterium is capable of injecting their genes into the normal plant cells and causing uncontrolled cell growth. Scientists have customised these strains and are now using them as a vehicle to inject the useful genes. This process is known as plant genetic transformation,” he explains. Once the genetic transformation is established in 2-3 days of incubation, bacterium growth needs to be ceased with the help of bacteriostatic agents (antibiotics). Dr Kumar’s team has used a selected regenerative type of callus instead of leaf explant (a technique to organo-typically culture cells from a piece of tissue from a plant) for the genetic transformation since most of the callus produced from the guayule is not regenerative into plantlets. “When we do the genetic transformation of whole plant tissue like leaf discs etc. a different kind of callus is produced from infected leaf discs, which may be of regenerative or non-regenerative in nature. Therefore, to ensure 100% regeneration, we developed a method based on the regenerative callus,” he says. Under this method the transformation efficiency of regeneration is found to be way higher than conventional reported methods. Moreover, guayule is a recalcitrant in-vitro regeneration meaning it is very poor in regeneration in the test tubes. “Therefore, callus based transformation system is important in case of guayule. Using this genetic approach more latex production is desirable.”

Genetic transformation When asked whether agrobacterium infection can prevent regeneration of leafs, Dr Kumar explained that the leaf explants of guayule are rich in the phenolic compounds. When they are subjected to the incision or wound, they leach out a considerable amount of phenolic compounds. The wound site acts as an entry point for agrobacterium and it results in

the release of phenolic substances, which is necessary for virulent (Vir) gene induction of agrobacterium. The high phenolic compounds leaching out from the wound site lead to the browning effect in plant tissue due to the oxidation of phenolic compounds in the presence of light. It causes the death/ necrosis of plant tissues and plant tissues lose their regeneration potential. The callus cell cultures of guayule have a negligible amount of phenolic compounds, which do not let resurgence of the agrobacterium growth during and after genetic transformation process. “Therefore, callus is a better tissue for the purpose of genetic transformation using agrobacterium for improving latex productivity in both Parthenium argentatum (guayule) and Hevea brasiliensis (rubber tree).” Browning of localised tissues following oxidization of phenolic compounds from cut or wound site in leaf explants leads to loss of the transgenic tissues, which are important to produce the genetically modified plant. “To overcome this barrier, we have developed an alternative genetic transformation method, which is based on the 100% regenerative callus, free from any kind of browning problem that hinder the regeneration capacity of plant cells and transformation efficiency as well in the guayule, which is a recalcitrant crop,” he says. Elaborating on his research on guayule germplasm and genetic engineering aimed at proliferating guayule and increase the output of latex, Dr Kumar said the growth of plant and latex productivity and refinement of germplasm are important aspects that can be done by plant breeding, “DNA barcoding to differentiate Parthenium species and lines is possible. Using the genetic transformation approach, we are aiming at enhancing the Isopentenyl Pyrophosphate (IPP) in guayule, which is the direct precursor of rubber molecule biosynthesis,” he explains. The IPP is produced in the plant by both the cytosolic mevalonate (MVA) and the plastidic methyl-erythritol phosphate (MEP) pathways. Using the model plant system, Dr Kumar’s team has shown that a higher IPP can be produced in a plant by genetic engineering of yeast mevalonate pathway into chloroplasts. The overexpression of IPP (isoprenoid) pathway of yeast into the rubber tree or guayule via genetic approach could substantially improve the latex yield (two to four fold higher). Dr Kumar believes that if the government takes appropriate policy measures the Thar desert could be turned green by cultivating guayule which will improve the quality of life of the people, discourage them from urban migration and contribute to India’s rubber economy as a supplement to production from Heave trees.

Tyre Asia October/November 2017

2017

International

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Race Track

Red Bull Red Bull made a stunning come-back at the Malaysian F1 GP when Max Verstappen won the race in style and team-mate Daniel Ricciardo finished third. The race was special for Sepang. F1 will not be returning to Malaysia anymore TA News Bureau

ercedes and Ferrari can step on their gas all year 2017, but in Malaysia it was the return of Red Bull. Max Verstappen turned the table to win the F1 GP at Sepang. It was a very special birthday bash for Max, who turned 20 during the weekend. The Dutchman added one more to his maiden win at the 2016 Spanish GP by controlling the race from early on. Starting from third, Max benefited from Kimi Räikkönen’s early retirement before fending off an attack by Valterri Bottas in Turn 1. The crucial overtake on championship leader Lewis Hamilton (Mercedes) came at the start of lap four and he never looked back to seal an important victory. Max was joined on the podium by teammate Daniel Ricciardo in third, with Red Bull Racing coming close to replicating their 1-2 from 12 months ago. The Aussie picked up his eighth podium of an impressive season after some fine defensive skills to hold of a charging Sebastien Vettel (Ferrari). “It is amazing to win the race. Straight away I could see our pace was good and that Lewis was struggling with traction. I just went for it and used all

Tyre Asia October/November 2017

the battery power I could to get past him,” Verstappen said post race. “I knew that he (Lewis) was fighting for the championship and wouldn’t take too many risks, so I went for it. As soon as I passed Lewis I knew from there onwards I could control the race. The car was really good and our pace on the soft tyre was better than I expected. “It was a very physical race and very warm in the car, plus I haven’t been feeling that well this weekend but we managed to bring it home. You can never predict how the rest of the season will go but we keep improving the car and it is looking positive.” At the beginning I had hope that I could finish second but then after the pit stop it was just about holding on to third as Seb was coming,” Ricciardo said. I was always going to get my elbows out and make it as hard as I could but I was surprised that there was only one proper attack from him. Maybe he used all the tyres to get up to me and then after the attack I guess he had some problems.” It has not been a great start into the season for Red Bull. They had been fighting engine worries all along and were behind the rivals. But at Sepang it was a

different story. On the other hand, Ricciardo has been doing fine individually. He already had eight podium finishes. Sepang third marked the third time Ricciardo has achieved eight top-three results in a season after 2014 and last year. Swan song for Sepang It was a stunning swan song for Sepang track. Malaysia has bid farewell to Formula 1 GP. The government feels that the investment has not been making any good returns. The stands have never been full. Sepang was the first F1 track to be designed by renowned circuit architect Hermann Tilke. It has an interesting mix of medium and highspeed corners, but the biggest single challenge for the teams was cooling. The ambient temperature rarely drops below 30 degrees Celsius at this time of year, which placed added pressure on the cooling of the power unit in particular. They also had to watch out for the rain – when it rains in this part of the world, it usually pours. In 2009 the race had to be stopped after 31 laps due to a flooded racetrack and the later-than-normal start time of 3pm leaves the race vulnerable to a late-afternoon

thunderstorm. However, Sepang was many drivers’ favourite track. Force India’s Esteban Ocon said before the final race: “It’s sad we will be racing here for the last time because it’s such a cool track. I am going to miss it!”

Strikes Max Verstappen

2017 Driver Standings 1. Lewis Hamilton, GBR, MERCEDES 281 2. Sebastian Vettel, GER, FERRARI 247 3. Valtteri Bottas, FIN, MERCEDES 222 4. Daniel Ricciardo, AUS, RED BULL RACING 177 5. Kimi Räikkönen, FIN, FERRARI 138 6. Max Verstappen, NED, RED BULL RACING 93 7. Sergio Perez , MEX, FORCE INDIA MERCEDES 76 8. Esteban Ocon , FRA, FORCE INDIA MERCEDES 57 9. Carlos Sainz , ESP, TORO ROSSO 48 10. Nico Hulkenberg, GER, RENAULT 34

Tyre Asia October/November 2017

AUTO Watch

Nissan Leaf 2018 defines Intelligent Mobility

issan has launched its latest 2018 Nissan Leaf first in Tokyo and then in Boston, USA. The company claims Leaf is the world’s best-selling electric vehicle and is a product of Nissan Intelligent Mobility, empowering drivers with tomorrow’s technology so they can take on today (photo courtesy: www. nissanusa.com). The 2018 Leaf carries Nissan ProPILOT Assist technology, which makes traffic less stressful and drive more enjoyable. Steering Assist keeps you centered in your lane, even when the road takes a slight bend. In heavy traffic or highway cruising, it gives you more control and confidence, plus freedom when you want it. Leaf was first introduced in 2010 and has sold over 250,000 units globally, according to Nissan. It gives you instant torque and zero tailpipe emissions, proving that sustainable transportation doesn’t have to compromise the thrill of driving. Improvements to the 2018 model include a longer range of up to 150 miles versus its previous range of only 107 miles.

New Swift Sport premiered

uzuki’s all-new Swift Sport had its global premiere at the Frankfurt Motor Show early September (Photo courtesy: www.globalsuzuki.com). The third-generation Swift Sport features a lower, wider stance, more aggressive styling, and a torque-to-weight ratio that propels the Swift Sport into genuine hot hatch territory. “We know that our customers value a dynamic driving experience above everything else,” said Swift Sport chief engineer Masao Kobori, “so we’ve made the new Swift Sport lighter, faster and more stimulating in every way.” Kerb weight is now down 80kg to only 970kg, maximum torque is up 70N⋅m to 230N⋅m, and the Swift Sport’s acclaimed handling is more responsive than ever. The result is genuine hot hatch performance that takes the Swift Sport to the next level. The Swift Sport’s athletic stance and performance credentials are enhanced by an exclusive front grille and bumper, and aerodynamic front-lip spoiler, side skirts, rear diffuser and roofend spoiler. 17-inch polished alloy wheels and dual exhausts complete the picture. The new interior stimulates the driver’s senses. Accent panels, colour-contrasted gauges and precision dials provide visual impact, while semi-bucket seats and high-quality textures keep the driver firmly in control of the fun.

Volvo XC40: Safe bet Hyundai i30: ‘People’s car’

he new Hyundai i30 N had an excellent test run at the Nürburgring race track recently. Hyundai calls it the new “People’s Car. It comes with a 7-airbag system and Advanced high strength steel (AHSS). 53.5% application of Advanced high strength steel (AHSS) plates boost driving and collision safety, according to Hyundai’s i30 brochure. The 7 airbags, including driver seat, passenger seat, driver’s knee, side and curtain airbags, protect passengers from collisions all-round (photo courtesy: www.hyundai.com). The Blind spot detection (BSD) alerts the driver about vehicles in blind spots or vehicles approaching the back side of your car at high speeds. The Hillstart assist control (HAC) automatically holds the brakes to prevent the car from rolling back when starting from a hill. The guidelines on the monitor screen show the expected vehicle trajectory based on the steering wheel position to assist parking on reverse. The car is powered by a 2.0-litre turbo petrol engine. The sixspeed manual gearbox has a slick enough action, plus an autoblipping function that can be manually selected via another button on the steering wheel.

olvo Cars, the premium car maker, has launched its new XC40 in Milan. As in all Volvo cars, safety comes first. The Volvo XC40 has pilot assist system, City Safety, with cross traffic alert, brake support and a 360 degree camera that helps drivers park the car. The Volvo ‘Pilot Assist’ used in the new Volvo XC40 helps another person to start the car without a key fob. It is done through an app. The owner can authorize a third party to use the car. The Volvo XC40 is based on the Compact Modular Architecture (CMA) platform. This platform is at present shared with only the flagship XC90 and also the Geely made Lynk & Co 01. It is a smaller but equally advanced version of the Scalable Product Architecture (SPA) that forms the basis of the S90 and the V90. The shared technology between SPA and CMA will include powertrains (both conventional and new plug-in hybrid variants) and the infotainment, climate and data network and safety systems .Additionally, the company believed that the CMA-based cars will significantly increase its global volumes The Volvo XC40 comes with an option between D4 diesel or a T5 2-litre petrol four-cylinder 250PS Drive-E powertrains. Volvo also states that a hybrid and a pure electric version will be added to the XC40 later. The Volvo XC40 will also be the first car from the brand to come with the new 1.5-litre 3-cylinder motor.

Tyre Asia October/November 2017

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06.09.17 16:01

Product Watch

MRF PERFINZA FOR LUXURY CARS

RF Limited, India’s largest Tyre manufacturing company, has released the PERFINZA range of Luxury & Premium range of tyres. The Top Management was present at the launch with their Global Brand Ambassador cricketer AB D’Villiers. PERFINZA by MRF achieved the distinction of being the first tyre made by any Indian Company to be approved by a leading global luxury car manufacturer. These tyres are released initially for India and will thereafter be released for other global markets, the company said. PERFINZA by MRF has been developed, tested extensively and perfected for Luxury & Premium Sedan Cars. Comprehensive testing, under both wet and dry conditions were conducted in

TOYO LAUNCHES AIRLESS NOAIR

India ,Germany and the IDIADA proving ground near Barcelona in Spain, Europe’s most comprehensive independent testing centre. The PERFINZA Range of hi-speed rated tyres currently available for over 60 Luxury and Premium Cars in India is backed by specially trained network of MRF TIRETOK & T&S Showrooms across India. These tyres feature an asymmetric tread pattern with a silica-based “green tyre technology” compound and offer the customers a well balanced package of ride, handling, traction and control in all weather conditions. Koshy K Varghese, Executive Vice-President, Marketing, said, “Our R&D Engineers had one word in mind when they engineered this tyre – Perfection. Perfinza by MRF is a tyre that delivers the perfect drive every time. The communication uses A B de’ Villiers, another outstanding example of perfection on the field and off it to showcase how perfection in a tyre results in an exceptional driving experience.”

reports, the company is preparing to market the prospective next-generation product as early as possible. Noair tyre features 50 sets of cross-shaped resin supporting rods lined up in a circle in place of air to bolster the weight of a vehicle and absorb shocks from the road. The company has been working on the product since 2006 to improve durability and reduce noise. While the previous prototypes ran at a low- to moderate-speed, the latest one is capable of operating at a high speed up to some 120 kilometers per hour, the company said. The durability of the latest prototype has increased by more than eightfold compared with the previous pilot models. Toyo Tire has conducted a demonstration run using a passenger car at a park in Osaka, Japan.

oyo Tire and Rubber Company has launched an airless tyre Noair- on a pilot basis. The company is yet to decide when to commercially launch the tyre in the market. According to media

Tyre Asia October/November 2017

“Rolling resistance has been reduced by at least half compared to previous prototypes and is 25 per cent better than Toyo’s commercial products. High environmental and safety performance levels have also been achieved, such as reducing wet braking distance by four per cent,” said media reports.

APOLLO EXPANDS EUROPEAN OEM SUPPLY

rom being a replacement market focused company in Europe, Apollo Tyres is now expanding supplies to the European Original Equipment Manufacturers (OEMs) in the passenger car tyre segment. The company’s premiere brand, Vredestein, has been selected as a fitment on the Volkswagen Polo, SEAT Ibiza and Ford EcoSport, and the supplies have already begun to these auto makers.

Tyres has embarked on a very important journey with European OEMs. While these are the first few, there are several other OE approvals in the pipeline for our passenger car tyres. Such OE approvals are a testimony of our high quality products and our focus on superior design.” Volkswagen Polo owners will enjoy the dynamic and comfortable driving performance of the Vredestein Snowtrac 5 (winter tyre), Sportrac 5 (summer tyre) or Quatrac 5 (allseason tyre). The range for the SEAT Ibiza will consist of the Vredestein Sportrac 5 and the Quatrac 5, while the Ford Ecosport will be fitted with the Vredestein Sportrac5 tyres.

“I would like to congratulate my team, which has been working relentlessly towards gaining OE approvals in Europe,”commented Neeraj Kanwar, Vice Chairman & MD, Apollo Tyres Ltd. By entering the supply chains of worldleading carmakers such as Volkswagen, Ford and SEAT, Apollo

As Apollo Tyres has started the supplies of OE tyres for top-quality cars, the company’s new manufacturing facility in Hungary – one of the most advanced in the world – will contribute to the acceleration of Apollo Tyres’ OE journey in Europe.

DAVANTI DX390 GETS TÜV SÜD NOD

BKT PRESENTS NEW FORESTRY TYRES

avanti Tyres has secured approval from TÜV SÜD on its DX390 tyre. It was tested against several mid range competitors, with a weighted outcome which outperformed all tested rivals in most safety-relevant criteria such as wetbraking and dry-braking. Davanti’s manufacturing plant was also visited and audited several times for the approval process. Davanti’s mileage capability was also recently tested by IFV in Germany with results that demonstrate that tyres’ longevity is equivalent to leading OE standards. The IFV mileage testing coupled with the TÜV SÜD performance certificate now gives the perfect combination of safety and performance along with a low cost of ownership, said the company. “Achieving the highly sought after TÜV SÜD performance mark is a real milestone for Davanti and testimony to the fantastic quality of our tyres. It is an all- encompassing accolade which includes audits of our production facilities, independent validation of our industry leading label grades, and testing of handling features not covered by the EU labels. Davanti were tested against some wellestablished European brands and we were delighted to see that Davanti’s final weighted result outperformed all other reference brands,” said Peter Cross, Commercial Manager at Davanti Tyres.

ff-Highway tyre manufacturer BKT has developed specific tyres for the forestry sector. The four new forestry products are Forestech, FS 216, TR 678 and F 240. Forestech is the BKT tyre moving through the forest with exceptional strength and resistance even under the toughest operating conditions. Its sturdy bead and the reinforced shoulder area ensure high puncture resistance. All these features make Forestech the ideal tire for forwarders. It is available on the market in three different sizes: 600/55 – 26.5, 710/45 – 26.5 and 750/55 – 26.5. FS 216’s extraordinary cut and tear resistance make it the perfect tyre not only for forwarders, but also for skidders. Good traction, top self-cleaning properties and high load capacity complete the picture of the tyre, which is available in eight different sizes. TR 678 has been designed for forestry harvesters. It joins the previous two patterns in terms of strength and resistance – essential requirements in this application. It is a very versatile tyre, which is also suitable for excavation operations, and presents best self-cleaning properties in addition to excellent traction. F 240 is the latest addition to BKT’s forestry tyres, specifically designed for logging operations. The tread compound ensures an extended product life-cycle along with cut, wear and tear resistance. Tyre Asia October/November 2017

Company Watch

GOODYEAR TO ACQUIRE VENTECH SYSTEMS

he Goodyear Tire and Rubber Company will acquire Ventech Systems, a leader in automated tyre inspection technology, from Grenzebach Maschinenbau. Based in Dorsten, Germany, Ventech Systems delivers innovative measuring devices for the vehicle industry. It provides a fullyautomated tyre inspection system that quickly and easily checks tyre pressure, tread depth and vehicle weight for buses, trucks, cars and other vehicles. “Over the past three years, our Goodyear Proactive Solutions

business has collaborated with Ventech Systems to integrate its data gathering and analysis capabilities into our fleet management solution. Feedback from our fleet customers has been excellent, and we view this as an important opportunity to enhance our service and value proposition for customers,” said Christopher Helsel, Goodyear vice president and chief technology officer. “Goodyear’s strong market presence enables additional worldwide growth opportunities for Ventech Systems. We are excited to support

Goodyear’s fleet customers with our unique technology in terms of process optimization, business efficiency and road safety,” said Andreas Pietsch, Ventech Systems chief operating officer and business manager. The acquisition will further expand Goodyear Proactive Solutions’ commercial offerings with an efficient, user-friendly closed loop service enabling fleet operators to measure tyre pressure, tread depth and vehicle weight on all their vehicles each time they enter or exit their depot.

COOPER TIRE REPORTS $45 MILLION Q2 EARNING

ooper Tire and Rubber Company has reported second quarter 2017 net income of $45 million, or diluted earnings per share of $0.85, compared with $71 million, or $1.27 per share, last year. Consolidated unit volume decreased 0.5 per cent compared with a year ago, with strong growth in the International segment that was offset by lower volume in North America. Net sales decreased 2.6 per cent to $721 million. Operating profit was $75 million, or 10.4 percent of net sales, which is a decrease of $35 million from the

prior year, reflecting a volatile raw material cost, product pricing, and promotional market environment. The company’s raw material index increased 20.7 percent from the second quarter of 2016, with raw material costs increasing by $60 million from the prior year. “Cooper reaffirms our guidance for full year 2017 operating profit margin to be at the high end of our previously projected 8 to 10 percent range. This is based on a better than expected second quarter operating profit margin of 10.4 per cent, and a second half

that we believe will also come in at the high end of that range. The tire industry continues to face turbulence in the US market in the form of raw material cost variability, weak trends in retail sell-out of tires to consumers, elevated inventory in the channels and a fluid pricing and promotional landscape. Cooper also achieved strong year-over-year second quarter unit volume increases in Latin America and Asia, as well as in truck and bus radial (TBR) tires,” said President and Chief Executive Officer Brad Hughes.

NOKIAN POSTS STRONG FIRST HALF 2017 RESULTS

okian Tyres has posted strong first half 2017 results with solid full year expectations. Net sales increased by 17.2 per cent to EUR 718.9 million. Currency exchange rate changes affected net sales positively by EUR 32.2 million during January–June 2017. Operating profit increased by 19.6 per cent to EUR 153.0 million. The profit for the period increased by 15.1 per cent to EUR 116.4 million. For the April-June second quarter of 2017, net sales increased by 16.5 per cent to EUR 393 million. Currency exchange rate changes affected net sales positively by EUR 10.9 million compared with the

Tyre Asia October/November 2017

rates in the same period in 2016. Operating profit increased by 21.5 per cent to EUR 94.1 million. The profit for the period increased by 16 per cent to EUR 71.1 million. “The Passenger Car Tyres business unit showed strong growth during H1 2017. Net sales and operating profit increased clearly year-overyear, and we were able to increase our market shares in our main markets. The growth was driven by Russia due to its stronger currency, price increases and low carry-over stocks from 2016. The growth in Russia will be moderate in H2 2017, as H2 2016 was already strong. We have been responding to the

growing demand by increasing the production volumes at both factories and by building a new production line at the Russian factory. The new production line will be taken into use by the end of the year,” said Hille Korhonen, President and CEO, Nokian Tyres. He added that that raw material costs will increase by approximately 20 per cent for the full year 2017 compared with 2016. In 2017, with the current exchange rates, net sales and operating profit are expected to grow by at least 10 per cent compared to 2016, the company said.

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EVENTS

TIRE TECHNOLOGY EXPO 2018 EYES BIGGER RECORD A fter a record-breaking second year in Hannover in 2017 (the 17th year of this industryleading show in Europe), Tire Technology Expo will return to the Deutsche Messe in Hannover for three days on 20-22 February 2018. With the floor space now increased to 20,000m2, show organiser, UKi Media & Events, expects the next year’s event to be even bigger than in 2017, with every expectation of increasing overall attendance beyond the near 6,000 record of last year. Tire Technology Expo is Europe’s most important international gathering of tyre manufacturing experts, making it a fantastic opportunity to view and debate all the latest innovations in materials, chemicals and machinery. The list of hot topics to be discussed in Hannover

Tyre Asia October/November 2017

next February includes automation, big data and Industry 4.0, intralogistics, production efficiency, tyre labelling and RFID tagging. Joining the numerous returning companies – including industry heavyweights such as HF, Mesnac, Siemens and VMI – will be many firsttime exhibitors, including German suppliers Getriebebau Nord (drive systems), Ilmberger Maschinen- und Zahnradfabrik (gearing technology), Industriefabrik Schneider (steam packages for curing presses) and Festo (automation). Innovative testing technologies will be the focus for two other newcomers, MonTech (rubber testing solutions) and Camber Ridge, which has opened a groundbreaking indoor facility in

Charlotte, North Carolina.

The chemicals and materials area of the expo will be strong once again, underlining the innovative research being done to meet performance and sustainability challenges with newly developed materials and sophisticated compounds. Some of the new exhibitors in the chemicals and materials field at the 2018 show will include ShinEtsu Silicones Europe BV and Madura Industrial Textiles. Hailing from the Netherlands and India respectively, these companies underline the global nature of Tire Technology Expo’s exhibitor and visitor base. With its parallel programme of conference sessions close to the exhibition hall, numerous short courses and the prestigious Awards Gala Dinner,

Tire Technology Expo 2018 offers visitors, exhibitors and conference delegates a networking opportunity that is unrivalled within the tire manufacturing sector. “It is really fantastic to see Tire Technology Expo going from strength to strength year after year. Amazingly, it is now three times bigger than it was in 2012 and all set to break another record in 2018. It really has become the leading global event that embraces and celebrates the fantastic world of tire manufacturing and all its complexities,” commented show founder, Tony Robinson.

Success of 2017 The 2017 event, held for the second time at the Deutsche Messe in Hannover in February, was the 17th since the show’s foundation and the biggest yet, with 280 exhibiting companies, more than 600 conference and course attendees, and a three-day visitor and delegate total that nudged the 5,000 level for the second year running. “Remarkably, within 15 minutes of opening the doors on the first morning, it was obvious that Tire Technology Expo 2017 was going to be even better than our best-ever show in 2016,” said Tony Robinson. “I’ve been delighted with the number of visitors from all over the world. The exhibitors were happy, but equally importantly, the visitors were very happy because the show was full of the latest technologies and materials that people are looking for.” Visitor Jukka Koskinen, development manager at Nokian Heavy Tyres, said, “Every year I make time in my calendar to attend the show. I visited many companies that I was interested in and I made strong contacts – all the manufacturers were there and it’s easy to find out answers to any questions that we may have.” Philippe Boone, engineering manager at Bridgestone, commented, “It’s good to investigate things in detail and discuss our concerns from the plant, because in this day and age we don’t really have much time to do this. We also attended the conference and it was an ideal opportunity to learn about where the industry is going.” Exhibitors were delighted with the quality of the visitors stopping by their stands to check out the latest products, services and technologies. “We would like to build bridges between the additive manufacturing industries and the tire industry, and there was an excellent

mix of people at the show, including customers, suppliers and R&D experts,” explained Augustin Niavas, business development manager at EOS. “I was also a speaker in the conference,” Niavas continued. “I found it very exciting to learn what people are working on – I think we will definitely find a partner for additive manufacturing. I was also interested to learn about concepts of what tires will look like in 10 years and the challenges of the industry, such as how tires can contribute to the reduction of vehicle emissions.” Tire Technology Expo always plays host to important new product, technology and company announcements, and 2017 was no exception. Solvay took the wraps off its latest silica for tire manufacture, Premium SW. Winter tyre test specialist, Test World, used its presentation to the Scientific and Technical Conference

(joined this year by the new Business Strategy Conference) to preview the construction of three new indoor test tracks at its Ivalo, Finland proving ground. Mesnac subsidiary, TMSI, used the show to present its brand-new DFPM footprint measurement system, and Bartell Machinery Systems demonstrated its groundbreaking BeadView noncontact bead inspection system to expo visitors. Important technology trends such as the use of virtual reality for plant planning and staff training, Industry 4.0 and the adoption of 3D printing for tire mould manufacture, also featured strongly in the exhibition. And the best that the tire industry has to offer was rewarded in the Tire Technology International Awards, presented at a Gala Dinner at the end of Day 2. Winners this year included Bridgestone, Continental and Sumitomo Rubber Industries. Tyre Asia October/November 2017

EVENTS

GLOBAL PARTICIPATION AT TIRE SOCIETY CONFERENCE

any of the world’s leading tyre research engineers and scientists recently converged upon Akron, Ohio, USA, to blaze new paths in industry technology, as they have been doing for 36 years. This past September was no exception, with 130 tire people attending the Annual Business Meeting and Conference on Tire Science and Technology, organised by the membership of the Tire Society. The Tire Society’s mission is to disseminate knowledge and stimulate scientific and engineering development in the science and technology of tyres. As such, many conference papers are chosen for publication in the authoritative, critically reviewed Journal of Tire Science and Technology, published quarterly by The Tire Society. This year’s conference was a study in diversity, with participants from 10 countries across the Americas, Europe and Asia, and authors from some 15 different companies and universities presenting 20 varied and interesting papers. The authors touched on subjects of intense interest within the Tire Industry, as well as within the overall community. Advances were shared in topics that provide value to the consumer in terms of better ride and handling, durability, noise and ice traction, and this was complemented by work impacting sustainability and the environment, including papers on soybean oil replacing petroleum products, improved rolling resistance and an emerging effort to evaluate the effect of tyre particle

Tyre Asia October/November 2017

emissions on air quality. A mainstay of the conference is the insightful and ever more capable analytical and computational models, and several new lab and testing procedures were on display. Rounding out the conference were the tyre designers and chemists, sharing new approaches in tyre and compound design and optimisation. The conference was kicked off by a glimpse into the future, offered via the Keynote Address by Dr. Juan Botero, VP of Sales for Continental Americas Division. Increased urbanisation, the advent of connectivity and the need for ever more performance and efficiency and sustainability were some of the challenges this new generation will need to tackle. In particular, the industry is changing as it acquires new customers, with different outlooks, with the advent of disruptive technologies in autonomous vehicles and novel transportation business models that no longer require the purchase of a car. A highlight was a 45 year retrospective on the utilisation of Finite Element Analysis within the tyre industry, by Technologist Lecturer Dr. Ron Kennedy, most recently Managing Director, Center for Tire Research (CenTiRe), but having broken new ground with these tools at Hankook, Bridgestone/Firestone, and Firestone in his background. After that recounting of our Industry’s history with these tools, which resonated with many in the audience who were students or reported to these pioneers, the lecture turned to a look forward, laying out the

challenge for the outstanding needs as these tools continue their trend to replace more of the hands-on testing. Counter-balancing that deep dive into history and experience, were the six papers by university students, competing for a cash award given to the paper judged as Superior. Beyond the welcome stipend, these “New Light on Tire Technology” sessions have become a great way to insure a steady stream of innovative and motivated scientists are entering tyre industry. Awards to the Superior Paper and three Honorable Mention papers presented at the 35th conference were presented at the Awards banquet. The Awards Banquet Speech by John Maloney, General Manager of Penske Racing was a welcome change of pace, eagerly received by the audience that was dominated by racing fans. Besides the insight into the advanced aerodynamics testing and modelling that can define the margin of victory, he gave a look inside the Penske organization and culture. The Tire Society Conference proved once again that it is the hidden gem of Tire Science, not that well known, but jam packed with top notch technology by the top scientists and engineers in the field. One can find out more about the Tire Society, including past Conferences, Membership and access of the critically acclaimed Journal of Tire Science & Technology at www.tiresociety.org, or, contact at tst@allenpress.com.

EVENTS

CITEXPO A GRAND SUCCESS

he 15th China International Tire Expo (CITEXPO) was once again a grand success. Over 14000 visitors came from 120 countries to unlock the unlimited business opportunities of China. Packed exhibition halls with bustling crowd and excitement at the Shanghai World Expo Exhibition & Convention Center proved that CITEXPO is and will always be the must-attend trade show in tyre and wheel industry. “The result exceeds our expectations. Booths for next year are running out fast. Both exhibitors and visitors are satisfied, truly a great success.” Amy Wong, Overseas Marketing Manager, said. As always, CITEXPO is the most visited show by overseas traders in China. With over 40% of overseas visitors, CITEXPO is the only tyre and wheel trading show in China that is recognised internationally. CITEXPO has been co-operating with local leading companies in order to provide the best experience for worldwide professional traders. Leading exhibitors included Shandong Hawk International Rubber Industry, Shandong Huasheng Rubber Co LTD. and Linglong Group.

Continued from page 16

Need to revamp supply chain system by 4.9% to 12.863 million tonnes during 2017. World demand during the year is likely to increase by 1.0% to 12.803 million tonnes. These figures are based on actual data up to August 2017 and forecasts for the remaining months of the year. In means, 2017 is likely to end up with a closely matching supply and demand. More specifically, the demand-supply situation is likely to stay favourable to the market till end of the year. However, the market may swing on either side by tracking the general trends in commodities which are highly sensitive to global economic and geo-political factors. Coming to 2018, world supply can increase by 5.0% to 13.506 million tonnes and the demand by 3.5% to 13.251 million tonnes (Table 3). The projected supply is based on anticipated expansion of mature area across countries and by assuming normal climate and market condition. Demand is anticipated to grow

faster in 2018 owing to improved world economic outlook. These projections suggest that the world supply in 2018 would be 255,000 tonnes more than the demand. Obviously, the surplus is insignificant as it comes to less than 2% of the world supply.

Do you think the increasing emphasize on alternatives will bite into NR’s growth prospects in the future? Alternative sources of natural rubber from plants such as Guayule and Russian Dandelions are unlikely to contribute even 1% of the world demand for NR in the next few decades. These alternative sources do not pose any kind of threat to Hevea (Para rubber tree) even in the long-term future. It is also important to consider the potential available to increase the supply of NR from Heave. For example, take the case of Indonesia having around 3.7 million hectares of

rubber area. If the average yield in the country is increased from the present level of 1,058 kg/ha to 1,700 kg/ha, the corresponding additional supply is 2.4 million tonnes per year. The average yield of 1,700 kg/ha is achievable when compared to the level attained in countries like Vietnam. It means, huge untapped potential already remains with Heave. However, natural rubber may face stiffer competition from synthetic substitutes. The increasing penetration of electric cars and anticipated fall in energy prices are issues of concerns for NR sector. Potential fall in energy prices indicates possibility of synthetic rubbers becoming cheaper. ANRPC is undertaking a study on this issue in collaboration with the Malaysian Rubber Products Manufacturers’ Association (MRPMA). Preliminary results of the study are slated to be discussed in the Public Private Meet to be held on 24 October. Tyre Asia October/November 2017

LIMELIGHT

Transparent Truck

CONTICONNECT FOR REMOTE TYRE MONITORING

ontiConnect is Continental´s digital tyre monitoring platform for commercial fleets, which includes both products and tyre data services. The products create, monitor and transfer tyre related data in real time. The tyre data services allow the analysis, interpretation and display of these data; as well as triggering the respective physical service action(s), if needed. ContiConnect enables the customers to remotely monitor tyre pressure and temperature in real-time and notifies them in case of urgent alerts. In doing so it prevents tyre-related breakdowns and generates value by increasing the vehicle´s uptime.

notification services.

vehicle passes by the receiver in the yard.

• Monitors analyse and reports tyre pressure and temperature for entyre fleets based on data from sensors in the tyres, collected by a station in the yard.

• Sends the data to the backend where it is analyzed and interpreted.

• Sends alerts, if tyre pressure deviates from defined value. • Notifies group of defined recipients via e-mail or SMS and suggests corrective measures, if necessary. • Allows the fleet manager to act proactively instead of fixing problems reactively.

• It is installed at the fleet´s frequent touch points, like washing bay, gas station or other check-points.

Tyre Sensor - making the tyre intelligent • Tyre sensor connects the vehicle´s tyres with the outside world. • Mounted on the inner liner of a tyre.

• Higher uptime of entyre fleet, less maintenance, and overall success in mobility and efficiency.

• Optimal mounting position of the sensor is ensured, to measure both the tyre pressure as well as its temperature very precisely.

It is a crucial addition to Continental´s existing tyre monitoring system, ContiPressureCheck now giving whole fleets the best quality information to help maximize fleet efficiency and generate value due to more uptime. ContiConnect is the starting point for Continental to becoming a total solutions provider for all tyre needs.

Web Portal

• Sensor is protected from damage or theft.

ContiConnect has proven to be an efficient solution for remote tyre monitoring. It consists of different components, which include the sensors in the tyres, a yard reader station, a backend as well as a web portal and

Yard Reader Station – the receiver for tyre data

Tyre Asia October/November 2017

• Web portal allows real-time monitoring of the entyre fleet´s tyre performance and puts control into the hands of the fleet managers. • Different views as well as filter functions allow detailed analyses.

• Connecting component between the tyre sensor and Continental´s backend. • It reads the data off the sensors as the

• Both a retro-fit and a pre-fit solution are available. • ContiConnect will become even easier to install with the availability of intelligent tyre. • The intelligent tyre will come with a pre-installed sensor, making it faster and more convenient for fleets to start digital tyre monitoring, resulting in time savings while ensuring the sensor and housing are correctly installed within the tyre first time around.

LIMELIGHT

THE ART OF THE UNIFORMITY MEASUREMENT

he uniformity of a tyre gives an instant insight into its safety, quality and energy consumption. The usage of high-tech equipment, such as tyre uniformity machines in the tyre production is becoming more and more evident. Nothing should be left to chance when it comes to security. inmess, as one of the global leaders in manufacturing tyre uniformity machines for complete wheel assemblies, continues its firm steps along the way to achieve the same success in the field of tyre measurement machine. inmess has already made a name for itself in the nineties. Laboratory testing machines, like bead contact pressure measuring machines, rolling resistance machine and endurance testers for passenger cars or truck tyres were supplied to most known OEMs and Testing Laboratories. In 2003, inmess supplied the first Uniformity machine for complete wheels to Volkswagen. Further machines in combination with the unique inmess Beat Seat Optimizer followed to leading OEMs. Uniformity measurements are done by many companies. Doing uniformity measurements in Productions line is a much more difficult subject regarding compactness, robustness, cycle time and reliability. Due to the many systems inmess has installed within the last years, the uniformity machines of inmess meets this requirement with outstanding performance. In 2015, inmess launched its first Uniformity Measurement Machine for tyres as a logical consequence of the great success in the complete wheel sector.

by inmess. This is the only way to achieve a measured accuracy at a high quality level.

Measuring station

A user-friendly software is an essential component of an inmess uniformity machine - graphics and diagrams give an immediate insight into the quality of the uniformity of a measured tyre. The constant development and further development of new and existing measuring techniques enable inmess to become a valuable partner to a wide variety of customers in the automotive sector. The detection of bumps and dents in the tyre as well as the determination of geometrical properties are standard applications in the inmess tyre-uniformity-software. Through the close cooperation with a variety of partners and manufacturers, inmess recognizes that every user has its own requirements and suggestions as how the interpretation of the measurement has to be evaluated. Therefore the software is structured modularly so that every customer request can be followed up and will be easily implemented. A good database-management system to retrace old measurements results is very important for the analysis of the quality development for a defined period. Each information could thereby be important to undertake the right countermeasures.

inmess uniformity measurement machine

Most of the machine parts are designed and developed by the inmess engineering team. The choice of the right manufacturer requires a deep knowledge in the manufacturing process of such mechanical parts. Not all suppliers are able to guarantee the manufacture of components with a precision in Îźm range. An extensive and costly quality assurance before assembling the parts is of course essential to the desired performance of the uniformity measurement. Meanwhile, inmess develops intense relationships with word leading sensor manufactures. It is a cooperation that is based on the continuous improvement and enhancement of the measurement accuracy of the machine. The permanent test of the latest sensors belongs to the day-to-day activities

Evaluation of a measurement

As inmess has high interest in further development and in increasing its product portfolio, the brand new high speed uniformity measurement machine will be launched within the market by the end of 2017. It also applies here that all the knowledge which has been gained through the previous new developments helps inmess to achieve another success. Thereby inmess will cover 4 types of uniformity measurements machines: Tyre Uniformity Machine Laboratory, Uniformity Machine for complete wheel, Uniformity for tyres and the High speed uniformity machine. Tyre Asia October/November 2017

033 2290-3941 033 2289-0187 er@allindiarubber.net www.allindiarubber.net

Await a Blockbuster… Tyre Asia is turning 10! The pride of Asian Business Media (ABM) is today an internationally popular magazine that covers global tyre industry and its related sectors most comprehensively. The magazine is today a global presence at some of the most popular international events across the world, be it expos or conferences, with a commendable readership. It is also associated with two global conferences that ABM organises – Asian Tyre & Rubber Conference (ATRC) and Asian Retread Conference (ARC). There are more coming! To mark the momentous occasion, Tyre Asia is launching a blockbuster 10th Anniversary Edition in October 2018. Major corporates, industry leaders, research institutes and organisations will be part of this mega project.

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We invite you to be part of this venture and make the best of the opportunity to reach out to the “who’s who” of global tyre industry through advertising, sponsorships, contributing articles, features and company proﬁles.

Contact Antony Powath | Email: asp@abm.net.in | Mobile: +91 9833 901586

LIMELIGHT

KONSTRUKTA - TIRETECH STRIP WINDING SYSTEM By Mario Kapralik

ncreasing demands of tyre manufacturers looking for efficiency and predictable maintenance have to be followed by continuous improvement of manufacturing machinery. Quick installation and startup are expected as must. This being kept in mind results in design of new, more complex and automated production lines. KONŠTRUKTA – TireTech is a longtime tyre industry machinery supplier with more than 90 extrusion lines and over 100 cutting lines for steel cord and textile cord running in customer’s plants in 31 countries. One of the continuously developing product is Strip Winding System for tread and sidewall application onto the radial and bias tyre casing. There are several basic line’s composition following process requirements. Common design feature of main application unit is overhead design, bringing comfortable working environment, easy and quick installation and ability to current customer’s floor space situation adaptation. KONŠTRUKTA-TireTech offers complete production systems for bias or radial tyres. In case of different compounds application (base, cap, sidewalls) extrusion line consists of

Tyre Asia October/November 2017

number of extruders for separate compounds. There is a compound exchange managing algorithm to guarantee efficient material utilization during production phase change, to decrease waste time and scrap compound. In case of bias tyres production, complete independent line can be used, from extrusion machine up to the finished tyres manipulation systems with lifting platforms or hoists. Newly developed application head comes with narrow design, allowing closer distance from bead area during sidewall winding and higher application angles. Thanks to proper mass distribution, moment of inertia is minimized, that is very important for flexible dumping during contact winding process. When strip has been applied, it is stitched by stitching unit, positioned to the proper position by servodrive or in given fixed position. There are several stitching units design, including new multi independent swiveling rolls. This gives variability of process settings and together with recipe system allows individual settings for each product size. Flexibility and wide production range allows to build tyres with radial and bias casing construction with one application head. System can

be supplemented by one or more cooling devices, according to process demands. Tailor made software for strip distribution allows to prepare recipe for winding of any profile shape on base surface of any contour. Technology support, operator and maintenance training during startup is a matter of course. Like all state of the art machines, it is controlled by sophisticated control system, collecting all necessary data from energy management up to actual machine status. As a part of higher automation level, control system includes fault auto-detection and online possibility to connect service department and machine located in the customer’s plant.

LIMELIGHT

3D SMART SENSORS: ADVANTAGES OF HIGH-SPEED, HIGH-SENSITIVITY RUBBER AND TYRE INSPECTION results on dark targets. Other notable features of the 2430 and 2440 include a large FOV for wider scans and a compact new package with both top and side mounts built-in. These sensors can be networked (buddied) to scan more of the target so the user can accomplish more with fewer sensors, while capturing fine surface and edge details. The Gocator 2400’s measurement range covers larger depth variation and a wider variety of targets.

Tire inspection machine ISOL

utomated quality control in the rubber and tyre (R&T) industry requires a 3D machine vision solution with specialised features and capabilities. This is because R&T applications involve scanning lowcontrast, dark materials with complex geometry at very high speed––something that can only be achieved using robust 3D sensor technology.

Limitations of 2D System engineers often turn to 2D machine vision sensors to solve their scanning challenges. Unfortunately, 2D on its own cannot provide an adequate solution. For one, 2D sensors require complex lighting to see the black on black contrast. In some applications the lighting is placed underneath the material (e.g., when measuring the width of a strip), and hot sticking rubber contaminates the lights. Another disadvantage of 2D sensors is that they can’t produce measurements related to object geometry (i.e., 3D shape). As a result they are unable to measure critical features such as object flatness, surface angles, or part volumes, and are limited to contrast-based inspection. This makes 2D sensors a poor

solution for scanning complex shapebased features on dark surfaces, or for operation in low lighting conditions. In comparison, 3D sensors are contrast invariant and generate high-resolution scans regardless of the material or lighting conditions. They also capture the complete 3D geometry of the scan target, including critical depth measurements on surface features such as grooves in a tyre tread.

Need for High-Speed, HighSensitivity 3D LMI will be releasing two new smart sensor models, Gocator 2430 and 2440, to meet this demand for high-speed, high-sensitivity 3D in R&T applications. Both sensors feature the latest optical technology. A new generation 2-megapixel imager delivers high-resolution profiles at 5 kHz––making them ideal for any highspeed scanning task, including tread/ sidewall, rubber extrusion and more. Faster scanning allows users to speed up their inline process and achieve the highest resolutions. The imager in Gocator 2430 and 2440 is twice as sensitive, which results in cleaner profiles (i.e., less noise and outliers), and therefore achieves better

Gocator 2400 sensors are the smart 3D solution for R&T applications such as Tread profiling, Tire Uniformity, Gum strip lamination, Tyre building drum, Rubber unroll, and Rubber extrusion profiling.

Combining 2D and 2D for Specialised Applications Gocator smart sensors combine 3D and 2D technology in a single device to provide an effective solution for specialised R&T applications like identifying sorting code and DOT-Codes on tyre sidewalls. The raised or embossed DOT-Code characters on the tire sidewall are black on black, with effectively zero contrast. This prevents 2D machine vision from capturing the outline or edges of the characters. To solve this zero contrast problem, 3D sensors generate point cloud data of the embossed characters and render them as a height map. The height map is processed by OCR algorithms common in machine vision libraries to extract the DOT-code.

It’s Better to Be Smart Gocator’s built-in user interface presents a fluid and responsive point-and-click experience using any web browser on any computer or operating system. With no additional software to install, Gocator is ready out-of-the-box to setup and measure critical dimensions in R&T applications. Tyre Asia October/November 2017

China Tire Intelligence Report By Tire Industry Research

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Before your competitors! This information-rich weekly report brings you everything you need to know about China’s fast-developing tyre industry: Return to Contents page

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Government policies Legislation and tariff affairs Investments and expansions Price changes Corporate financial analyses Consolidations and closures Commentary and analysis Statistics Personnel movements Upstream suppliers Tyre retailing Retreading End-of-life tyre management

R E S E A R C H Compiled by Shaw Information Services trading as

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China Tire Intelligence report Week ending 5 May 2017

Section 3: International tire makers

Contents Section 1: Outlook

Publicly-quoted domestic tire companies ranked Tire companies’ 2016 results compared China may adopt Shandong’s pollution controls AmCham publishes study on China outlook

2 2 3 3

Section 2: Domestic tire makers

Linglong Tire to enter aviation tire business Court tells Ningxia Shenzhou Tire to repay debt Linglong organises workers’ games Prinx Chengshan discovers fraud; stops tender Giti and SAIC GM launch green supply chain Ex-Yinbao deputy takes seat on Huasu board Aeolus signs strategic deal with Goodpack Rubber factories characterised as polluting Aeolus to show 3-gen tires at Autopromotec ‘Linglong cup’ sponsored by Tsinghua Uni Zhejiang Liwang equipment auctioned Linglong wins fans among financial analysts Double Star revenues jumped in 2016 Double Star publishes stable Q1 results Linglong seeking tire factory in Czech Republic Double Star recruits Kumho OE engineers Kumho acquisition is full of suspense

4 4 4 4 4 4 4 4 4 4 5 5 5 6 6 6 6

This newsletter contains information about the tire industry in China. The information is provided in good faith, but it is not advice, and should not be treated as such. Without prejudice to the generality of the foregoing paragraphs, we do not represent, warrant, undertake or guarantee that the information in this newsletter is correct, accurate, complete or non-misleading. We will not be liable to you in respect of any special, indirect or consequential loss or damage. Page 1 of 11 — Week ending 5 May 2017

Michelin’s second monthly price increase? CST to open India, Indonesia plants in 2017

7 7

Section 4: Statistics and data

China’s NR imports surged in March Profits rise at rubber and plastic companies China’s rubber trade and price data

7 7 7

Section 5: Upstream and suppliers

“Chemical county” sees transformation Sinochem saw profit jump in Q1 CNPC Lanzhou produces ‘clean’ oil-filled SBR Thai rubber stocks may be less than thought CRIA to hold China Tire Safety Week

8 8 8 8 8

Section 5: Upstream and suppliers

Mesnac reports loss in 2016 Mesnac losses reduce in Q1 Carbon black prices to rise as plants close

9 10 10

Section 6: Retail and online activities

Why was CCTV’s tire test so unconvincing?

Section 7: Other activities

Seminar to focus on important OE technology Guangrao encourages bond issues to raise funds CRIA to conduct carbon trading training

11 11 11

R E S E A R C H

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R E S E A R C H

05/05/2017 15:27

LIMELIGHT

BLACK DIAMOND FROM FINLAND

he story of Black Donuts began in 2011, as a group of experienced tire professionals established a new consulting company. The vision was to offer exclusive services to different actors in the tire industry or to new investors willing to enter the field. Due to the anticipated wide range of services, the company recruited tire experts from various areas of specialization, such as tire plant design, manufacturing processes and tire technology. Market research made clear the gap in the market and the founders realized that Black Donuts would be first of its kind globally. There had to be growing demand for state-ofthe-art engineering services. This was confirmed immediately after the new company announced its establishment. Inquiries from all over the world reflected an actual need for new thinking and new services. Despite of its short history, Black Donuts has already fully established its position on the global market. The company name and story are widely known in Europe, but also in Asia, North America, South America and parts of Africa. There are now more than 60 Black Donut experts bringing new kinds of efficiency to the companyâ&#x20AC;&#x2122;s customers through questioning existing practices and processes and helping to see them from new perspectives. And the story goes on: a strong and sustainable growth is seen in the future, as well. Although the core business of the young company revolves around its unique combination of expertise, an overall respect for customer wishes is tightly present in the strategy and in all decisions. Whether the customer aims to rationalize the entire production or only to enhance single processes, it is given the full support of a highly motivated and customerfocused team. Thanking their existing partners and welcoming new ones, Black Donuts looks forward to continuing its successful cooperation in tire and machine manufacturing industry. Tyre Asia October/November 2017

Continued from page 29

Building agile digital enterprises be the best in not only adopting new technologies and new business models, but also in transforming the workforce.

Many business leaders fear that as Industry 4.0 progresses, there will be an acute shortage of talent to run digital enterprises. How should CEOs plan and prepare to take up this challenge? The fear for a shortage of (skilled) talent is correct. The reason for this is two fold: 1) business leaders are in search for profiles for a part of their business which is still very new, so the profile is not yet clearly defined, 2) education and training systems are mainly adapted to the previous and current needs but not always tuned to future needs. For example, we can be sure that there will be a need for data analysts. However, how companies will use data and the required input for their business models is not yet or only partially known, which means that their exact job role is not yet fully defined. That’s why it is important that business leaders prepare on different fronts. 1. They need to bring in people with basic knowledge of disruptive technologies (e.g. 3D printing, cloud applications, deep learning, artificial

intelligence, etc) and data analytics (basic data analytics treatment, security of data, data privacy and integrity, storage of large data sets, etc). This ensures that the company houses basic skills and can properly address questions from external service providers for assessing strategic directions, assessing potential company risks and creating alerts. 2. Companies need to train their employees to take up new roles. Employees should transfer company and application related knowledge to digital natives. The latter should bring in digital expertise. This reciprocity helps companies grow as business needs are addressed more efficiently. 3. Companies should interact with training providers and educational institutes to better coordinate academic and industry needs. This is likely to be done via sector organizations as a group of companies have more power than an individual company. 4. Companies need to create awareness amongst their employees about change. Changes will happen and employees should be prepared, and have an open mind. This ensures that they’ll support the company in its digital endeavour and transformation. You need people driving the change. 5. HR departments need to recruit

new people based on skills, attitude, ambition and future potential rather than a single competence (e.g. technological skills, service or sales). This requires different functional descriptions and additional supporting staff. 6. Enterprises need to link technology, business and application closer to each other as solutions are created simultaneously rather than consequentially. Changes are happening fast but not overnight, therefore companies should start the transition to keep the momentum going rather than aiming for a radical change overnight. In that view, it should be considered that there is natural outflow of people in every company (e.g. retirement), which creates opportunities to bring in new people and adapt the workforce. Finally, networking is very important as developing people and talent jointly is more effective. Therefore companies should actively seek for partners within their ecosystem to embark on the digital journey. Organizations such as Flanders Make assemble companies, research institutions and educational bodies in networks, stimulating a collaborative mindset and helping the entire sector progress. (The second and concluding part of the interview with Dr Dirk Torfs will appear in our next issue)

Continued from page 57

Ready with alternative TKS into bulk natural rubber, as well as fermentable sugar syrup and feedstock by-products, in a capital-efficient manner. Leveraging this technology, Kultevat produces different grade products just like the petroleum market where companies offer grades such as Unleaded 87, Plus 89, and Premium 93 minimum octane. Says Swiger: “Kultevat’s TKS rubber is the premium of the natural rubber market so it will command a higher price due to the attributes

Tyre Asia October/November 2017

and savings that it brings to the customers product.”Now viable technologies are available to make alternatives to natural rubber for tyre making. Kultevat has an ongoing partnership with KeyGene, a vegetable seed research and development firm whose clients account for more than 30 per cent of global vegetable seed production. The collaboration aims to commercialise the best germplasm and genetics for bulk rubber production. Its other tie-up is

with TKO that is aimed at increasing rubber yield. Kultevat germplasm have had rubber yields above 10 per cent, with one germplasm producing as high as 22 percent, Swiger revealed. Kultevat also partners with the Donald Danforth Plant Science Centre, which has some 1,700 PhDs in agricultural science on staff and has state-of-the-art technology, as well as greenhouses that provide artificial rain and sunshine. The future is in dandelion.

Retread Supplement

Retreading Makes Sense Contents l Retreading Pays Dividends: Adam Gosling l Fighting Fear, Uncertainty, Doubt: David Stevens l Retread Industry in India: An Enigma or a Myth?: VN Ramamoorthy l Better, Faster, Cheaper: Datoâ&#x20AC;&#x2122; Mohamed Ishak bin Abdul Hamid l To Be or Not To Be: The Dilemma of Clients and Auditors: PP Perera l Salvadori Thinks Bigger

Tyre Asia October/November 2017

RETREAD SUPPLEMENT

Retreading Pays Dividends Belt end separation is one of the most common causes of rejection during the retreading process. Having removed the tyre from service before all of the tread is consumed specifically for retreading the tyre is now rendered scrap value only. The investment has not returned the economic benefits that retreading provides

By Adam Gosling*

etreading, life extension, maximising return from your tyre investment, reducing pollution and environmental design - there are many reasons why retreading pays dividends. In order to prepare a tyre for retreading it must be treated properly in its first life in order to achieve a second, a third or even a fourth. There is one factor that must be consistent over a virgin tyre’s life, the inflation pressure. Adam Gosling

A tyre supports the load applied by containing the air within its structure. A tyre knows no difference between an over load or under inflation, it is all the same to a tyre. Given enough of either the tyre may well suffer a catastrophic failure. A tyre’s work is determined by the rate of deformation, that is how much the tyre deforms under the load and the frequency of deformation, how many times the tyre is deformed. Think about a speed hump as used in traffic calming scenarios. At 5 km/hr the hump is just that, a slow rise and fall, the tyre doesn’t deform very much. Now hit that speed hump at 50 km/ hr and the deformation is much greater, now hit is 100 km/hr and the tyre is shocked, not to mention the passengers in the vehicle. So the same obstacle encountered at different speeds will result in a differing rate of deformation of the tyre. The frequency, is about the rotational speed of the tyre. Rubber absorbs energy then releases it, the difference between the input and output remains within the tyre’s structure as heat.

Overload When a tyre is over worked the rubber within the tyre’s structure is “cooked.” It is like baking a cake, if you apply too much heat the cake overcooks and become less than edible at worst, not very good at best. For a steel radial the most susceptible area is at the steel belt end. The belts become detached from the rubber as the tyre overheats. The rubber surrounding the belts loses the adhesion qualities it is chosen for. Belt end separation is one of the most common causes of rejection during the retreading process. Having removed the tyre from service before all of the tread is consumed specifically for retreading the tyre is now rendered scrap value only. The investment has not returned the

Tyre Asia October/November 2017

economic benefits that retreading provides. How does a tyre user protect the investment made in the tyre? It really is quite simple. As previously mentioned, the tyre supports the load by containing the air we put into the tyre’s air chamber, the air actually supports the load, the tyre “merely” contains the air. The higher the load the stronger the tyre has to be. Heat is generated within the tyres’ structure in a process of physics known as hysteresis. The tyre will radiate the heat generated and under normal operations will achieve equilibrium where the heat generated is shed. When the tyre is over loaded, either by too much mass being supported, or being deformed too frequently by over speeding the heat generated will exceed the heat that the tyre is able to shed. The heat builds and may reach the critical point where the rubber starts to revert, once reversion commences it cannot be reversed, it can be limited but it cannot be “healed.” Imagine a triangular girder bridge, remove one piece of the structural steel at a time, whilst traffic continues to pass over the bridge. As more elements are removed eventually the structure will failure, more than likely catastrophically. A tyre is no different, it will absorb the punishment and abuse until it fails.

Retreading potential So how do we prevent the overloading of the tyre? There are two main factors that will assist a tyre’s retreading potential. Ensuring that the physical mass applied to the tyre does not exceed its load rating is the

he tyre supports the load by containing the air we put into the tyre’s air chamber, the air actually supports the load, the tyre “merely” contains the air. The higher the load the stronger the tyre has to be. Heat is generated within the tyres’ structure in a process of physics known as hysteresis. The tyre will radiate the heat generated and under normal operations will achieve equilibrium where the heat generated is shed

first step. Imagine a human lifting a weight, if the weight is too large the human body will be damaged, a tyre is no different. Now, whilst lifting that weight I want you to run as fast as you can, yes you’ll be exhausted very quickly, a tyre of no different to a human. Run whilst carrying a heavy load and you’ll die, run with a light load and you’ll survive. Why do we not think about what we ask from a tyre? Tyre manufacturers provide charts of loads and inflation pressures at set speeds. Vary any one of those parameters and the tyre will not perform as it is expected to.

Photo courtesy: Tytec Retreading Perth Australia

I had a truck owner tell me his tyre shop told him he had to upsize his wheels and purchase the next tyre size up, at a cost of $2000. The tyre was operating at 110 psi, it was rated at 120 psi. I asked the truck owner why he thought it was less preferable to simply put another 10 psi into the tyre rather than spend $2,000? The tyre was capable as it was rated at a maximum of 120 psi. By monitoring tyre pressures in real time the level of work a tyre experiences can be accurately gauged. A tyre retreader will always prefer a tyre that has been monitored by TPMS, tyre pressure monitoring than a tyre that has been ignored. If you are retreading your tyres and not using a quality TPMS then I have to ask “why are you throwing money away?” Look after your tyres so that when you call upon them to look after you they will be in a fit state to do what you ask of them. *Adam Gosling heads TyreSafe Australia (tyresafe.com.au) providing guidance and direction for mining and transport fleets around the globe. He is an executive committee member of TransafeWA (http:// transafewa.com.au/about-us/) a notfor-profit group for heavy transport safety in Western Australia as well as contributing to Road Safety Alliances funded by the Road Safety Commission of Western Australia (https://www.rsc. wa.gov.au/). Further, co-operation with the RAC WA (https://rac.com.au/about-rac) enables enhanced safety for the general community. Tyre Asia October/November 2017

RETREAD SUPPLEMENT

Fighting Fear, Uncertainty, Doubt The benefits of tyre retreading stack so heavily in its favour that educated buyers should have no doubts about purchasing retreaded tyres. Yet, doubts remain for an industry that has dealt for years with the FUD Factor (Fear, Uncertainty, and Doubt)

By David Stevens Managing Director, TRIB

eciding to buy and use retreaded tyres on your vehicle or in your fleet is an easy decision to make. At least it should be. The benefits of tyre retreading stack so heavily in its favour that educated buyers should have no doubts about purchasing retreaded tyres. Yet, doubts remain for an industry that has dealt for years with the FUD Factor (Fear, Uncertainty, and Doubt). Now, more than ever, the retread industry needs to expand our efforts to educate consumers, fleets, and governments about the economic and environmental benefits of retreading. I would suggest that retreaders can combat the FUD Factor with our own Factor: SRP (Safety, Reliability, and Performance). Letâ&#x20AC;&#x2122;s take each of these in turn.

Moving From Fear to Safety The oldest misconception we deal with in the retread industry is that retreaded tyres are not as safe as new tyres and that they easily come apart, leaving rubber fragments strewn about our highways. In recent times in the United States, a couple of states have used this misconception to look at banning the use of retreaded tyres in their states. These actions were started with a complete lack of understanding of retreading and the technologically sophisticated process retreaded tyres go through. Once studies were undertaken by these states and the Federal

Tyre Asia October/November 2017

Government to look at the use of retreading, they all reached the same conclusions. Both new and retreaded tyres rarely fail, but when they do, they fail at the same rate and the failures are primarily related to running under-inflated, overloaded, or abused in some other way. It almost always has nothing to do with the new or retreaded manufacturing process. These studies also determined that retreaded tyres were economically beneficial to the state and federal governments and recommended that the use of retreaded tyres be INCREASED where possible. Countless government fleets across the US use retreaded tyres for their school buses, fire trucks, ambulances and postal vehicles.

Moving From Uncertainty to Reliability Downtime for any truck or fleet can be costly in terms of repairs, missed deliveries, and lost profits. Thatâ&#x20AC;&#x2122;s why you see the best-managed fleets meticulously maintain a service and repair plan for their fleet, including their tyres. Large fleets that have access to thousands of points of data on their operations are constantly testing new technologies and ways of operating to decrease downtime and improve profits. Of course, retreaded tyres are included in this testing data to see how their cost-per-mile compares to other products, including low-cost new tyres. Time and time again, these fleets

Retread being applied to old tyre ((Photo courtesy:http://techintrend.net)

have found that a quality new matched to their specific application along with a strong casing management program and partnership with a quality retreader leads to the best combination of performance, cost, and reliability. A large part of the reliability of retreaded tyres comes down to the multiple inspections the tyres go through before and during the retread process to ensure they are good candidates for retreading. From visual inspections, high-voltage debris detectors, x-ray, and shearography; potential candidates for retreading are poked, prodded, and carefully analyzed to ensure they can serve another useful life on the road.

Moving From Doubt to Performance New truck manufacturers specifically engineer their tyres to be retreaded multiple times and provide warranties that guarantee their casings for multiple retreading lives. Fleets that buy new tyres and don’t retread them are simply throwing away a huge part of their investment. We often get asked by drivers how many miles they can expect to get from retreaded tyres. The fact is, if you buy a quality casing, maintain proper air pressure, pull the casing at the right point for retreading, and use a similar tread design and compound in retreading; there is no reason you shouldn’t get similar mileage (and sometimes more) from a retreaded compared to a new. For this reason, many of the new manufacturers will offer retreaded s in the same tread pattern and compound as their new tyres. If you find the that works best for your application, you will likely be able to replicate that success with each subsequent retreading. While Safety, Reliability, and Performance (SRP) are key components of the retread story, the story would not be complete without discussing the environmental benefits of retreading. This may not influence the bottom line of companies using retreaded tyres, but it

influences the bottom line of the world in which we live. Retreading saves massive amounts of raw materials, including rubber, steel, oil and other chemicals used in the manufacturing process. It takes approximately 22 gallons of oil to manufacture a new commercial truck, but only 7 gallons of oil to retread the same. Every year, instead of becoming havens for disease-

etreading should be an easy decision to make and it’s our job in the industry to continue that process of educating potential customers about the SRP of retreading and dispel any FUD that may linger in their minds. This perhaps has become more challenging as the price of low-cost, low-quality imported tyres has reduced the initial cost differential between new and retreaded tyres carrying mosquitoes, millions of tyres are kept out of landfills through successful retreading and eventually being recycled into fuel, rubber mats and other products. Retreading should be an easy decision to make and it’s our job in the industry to continue that process of educating potential customers about the SRP of retreading and dispel any FUD that may linger in their minds. This perhaps has become more challenging as the price of low-cost, low-quality imported s has reduced the initial cost differential between new and retreaded tyres. However, this has not altered the total cost-per-mile benefits of a strong retreading program. Intelligent customers who view their tyres as an investment and not an expense will profit greatly from their investment in retreaded tyres. For more resources and information about the benefits of retreading, please visit our website at www.retread.org. Tyre Asia October/November 2017

RETREAD SUPPLEMENT

Retread Industry in India: An Enigma or a Myth? The Retread Industry in India, unlike other advanced and developed nations, is highly fragmented. Customers are willing to entrust the quality and safety of their tyres to even road side repairers and retreaders whose technical competency and the quality of machineries and materials used for retreading/ repairs are highly suspect

By VN Ramamoorthy*

he concept of tyres, retreads and the “tyre technology” is more than a century old. But the industry scenario and core knowledge about tyres and retreading in India are, in my opinion, still at a nascent stage.

Overloading and abuse of vehicles and tyres is taken for granted here. Roads, whether urban or rural, are a potential threat to the vehicles, tyres and their safety.

I stepped into Tyre Retread business in 1994. Till then, I had no technical or commercial knowledge of tyres or retreads, except that four of them were fitted in my car and they were black and round!

Safety factor

For a vehicle operator, especially a large fleet owner of bus, truck or trailer trucks the “cost of tyres” is the second highest cost, next only to the cost of fuel. There is an enormous scope for cost saving in tyres leading to better and longer service of each tyre and for reducing the purchase of new tryes by a fleet operator. This scope can mainly manifest in 3 ways:

“What do you want from your tyres?”

- By proper fitment and use of tyres - By proper maintenance and care of tyres - By adopting Quality retreads of worn tyres at the right time If you travel to advanced countries like US, Europe, Australia or even to Middle East, South East Asia/Far East, you will witness as to how the vehicles’ tyres are maintained. You will find well laid out, proper roads/highways. Vehicles are maintained spic and span, no overloading, no abuse and for them, not only speed, but safety is also equally important.

Compare this scenario with Indian vehicles and roads!

Tyre Asia October/November 2017

Whenever I held a Tyre Care Seminar for end users (I have done hundreds of such seminars for both Commercial tyre users and users of the OTR – Off the road tyres), I used to ask a simple question

Almost always the answers were “Low cost,” “High Mileage,” “Long Life,” “More load carrying capacity,” “Best mileage at low price” etc. Not a single customer so far has asked for “Safety” in his tyres! Don’t you need “safety” for your vehicles, your passengers and goods carried by you? Is it not of prime importance, even more than mileage, long life, low cost etc.? The retread industry in India, unlike other advanced and developed nations, is highly fragmented. Customers are willing to entrust the quality and safety of their tyres to even road side repairers and retreaders whose technical competency and the quality of machineries and

materials used for retreading / repairs are highly suspect. It is an “Enigma” – How can one compromise the safety of vehicles, passengers and the goods by overloading and by abuse of the vehicles and the tryes? It is an “Enigma” – How can one entrust the safety and life of the tyres into the hands of unqualified, incompetent road side vendors? It is a “Myth” - How vehicles are overloaded much against the rated, recommended loads and specifications of their manufacturers? - How vehicles are used in such bad road conditions? - How tyres can perform under such abuses of overload, over/under inflation, bad roads, inexperienced driving methods?It is common knowledge that when a vehicle runs, heat is generated in the tyres due to various factors, like friction , load , road surface condition, the ambient temperature and more than all these , more heat is generated because of the “flexing” of the side walls of the tyres during the run. Then how to run them “Cool “or “Less Hotter” is the question. This needs a little more elaboration and discussion on the proper Tyre use (or shall we say “less abuse) and recommended Tyre care.

Heat factor The typical commercial Truck / Bus tyre is manufactured to withstand high pressure and high operating temperature. The main component in the manufacture of tyre is Rubber (Natural rubber). The worst enemy for rubber life of rubber - is “heat.” The “hotter” it runs the lesser is its life. Cooler the tyre runs, longer is its life.” It is common knowledge that when a vehicle runs, heat is generated in the tyres due to various factors, like friction, load, road surface condition,

the ambient temperature and more than all these, more heat is generated because of the “flexing” of the side walls of the tyres during the run. Then how to run them “cool “or “less hot” is the question. This needs a little more elaboration and discussion on the proper tyre use (or shall we say “less abuse) and recommended tyre care. There is a crying need to understand the basics of tyre maintenance and timely repair and retreads. To augment this, end users and vendors of repairs / retreads must also understand the concept of “cost per kilometer” - CPKM (in the case of OTR tyres it will be cost per hour or CPH). Finally, the most important and relevant topic is “Proper Tyre Care Tips,” which will be of prime importance for end users, whether you are a single vehicle owner or a small / medium / large fleet owner. This can be achieved only by rigorous and continuous training and education by experts in the field.

t is common knowledge that when a vehicle runs, heat is generated in the tyres due to various factors, like friction, load, road surface condition, the ambient temperature and more than all these, more heat is generated because of the “flexing” of the side walls of the tyres during the run This article touches upon only the periphery – there is a lot to be discussed on the retread industry in India – the numbers, the methodology, “organised vs. unorganised sectors,” radialisation, need to update our practices to international standards etc. * VN Ramamoorthy is former CEO of TVS TREAD, the retreading arm of the renowned TVS Group. TVS is a major player in the retread industry in India and probably the single largest tyre retreader for over seven decades. Tyre Asia October/November 2017

RETREAD SUPPLEMENT

Better, Faster, Cheaper The theme of Asian Retread Conference (ARC 2018) captures in essence the actions needed for retreaders to remain competitive, relevant and to be the first choice of customers

By Dato’ Mohamed Ishak bin Abdul Hamid Chairman, Asian Retread Conference (ARC) “

etreaders Strike Back.” That’s how Asian Retread Conference (ARC 2016) ended, echoing the urgent need for the retreading industry to act with the advent and threat of cheap new imported tyres. The ARC 2018 tagline: BETTER, FASTER, CHEAPER captures in essence the actions needed for retreaders to remain competitive, relevant and to be the first choice of customers. Many questions have been asked about the words in this tagline, particularly the use of the words Faster and Cheaper. Questions like: 1. Does Faster mean that product safety would be at risk? 2. Does Faster and Cheaper mean that product quality is compromised? 3. Does Faster mean the product is made to go faster on the road and hence be unsafe? 4. Does Cheaper mean that low quality materials and components have been used? To address these and the many other questions that are and will be in the minds of people, let me shed some light as to the background to the selection of these three words and why they were chosen as the theme for ARC 2018. When we were thinking of a theme for the ARC 2018 we reflected on the private discussions we had with participants and visitors to the ARC 2016 meeting, as well as the issues that came out strongly during the conference itself. The three main issues captured and highlighted were: 1. The perception that retreads were generally of poor quality as evidenced by tyre debris

Tyre Asia October/November 2017

frequently found on highways. This had led to some non-governmental organisations calling for a ban on all retreads. 2. Retread customers wanting a faster turnaround time of their own casings (COC) – basically wanting faster production cycles and 3. Serious concerns of the impact of cheap new imported tyres on the retread business. Based on the above three issues, and, during the closing of ARC 2016, we said that retreaders need to get down to doing things Better, Faster, Cheaper and we therefore decided that this was the most apt tagline and theme for ARC 2018. Briefly, the choice for the use of these words and their meaning are as follows: A. Better refers to the improvements that need to be made to the present market situation of retreads as well the way of doing things. These are; (i) addressing the perception that retreads are of poor quality (ii) reviewing all internal processes with a view to improving them for a better and more consistent product (iii) investing in state of the art equipment as well as using new and improved materials and components for a better product As for the perception of retreads, we would like to have papers for ARC 2018 to debunk this notion as it is a well-known fact that retreads, when properly made, can be as good as new tyres. It is also very well known that even aircraft tyres are retreaded many times. B. Faster refers primarily to production rate and

efficiency in the plant, i.e., improving the number of tyres produced within a given period of time. This came about because some customers wanted a quicker turnaround time of their casings – basically faster production cycles. The word Faster is NOT meant to imply or suggest vehicles running faster with retreads but rather on how the retread companies speed up their production. Again, we hope to have papers from retreaders, machine manufacturers, component and material suppliers on how they can contribute towards better and faster production methods for retreads which will, in turn, result in better plant operational efficiency and a lower product cost. C. Cheaper – by doing things Better and Faster this should naturally translate to a lower production cost. Retreaders, like in any other business, should also be mindful of all cost elements throughout the organisation. Cost reduction exercises must be done across the board and in all departments be it Human Resources, Sales and Marketing, Technical and others and not just in the Production. We believe this is an area where the retreader is in full control. When the going gets tough, the tough must get going! There is no time for pussy footing when the whole industry is facing a massive challenge. This must be done as a Strategic Initiative with long term goals. To do this effectively, they must be bold and creative so as to innovate and introduce new and innovative ways of working

into every process throughout the organisation, using technology extensively and aiming high to optimise their cost base. As expressed at ARC 2016, this should be treated as the retreaders “Burning Platform.” Every employee and stakeholder in the industry must know this and must act in a consorted effort to save every dollar. They must know that one dollar saved is one dollar straight to the bottom line. It is hoped that we will get many papers on how retreaders, machine manufacturers as well as material suppliers can together bring down the cost of retreads. Sharing of such knowledge will in general keep this green industry alive. Compared to new tyres, retreads use less energy and oil to produce and worldwide help keep many millions of tyres out of the waste stream – helping create a greener environment for us and our future generations. However, there are challenges! Cheap new imported tyres, thrown treads on the highways, poor perception of retreads and escalating costs all pose a real and immediate danger to the survival of the retreading industry. It is hoped that at the ARC 2018, with the participation and coming together of the great minds and new technologies of tyre retreaders, material suppliers, fleet operators, logistics companies, academia, public transport firms and the aviation sectors, “Retreaders Will Strike Back” and keep one of the most environmentally friendly recycled product going for many years to come. Tyre Asia October/November 2017

RETREAD SUPPLEMENT

To Be or Not To Be: The Dilemma of Clients and Auditors Implementing ISO 901:2015-based Quality Management System in SME Tyre Retreading

By PP Perera

t is a well known and widely accepted fact that tyre retreading offers substantial economic, environmental and social benefits that enhances the “triple bottom line” improvement towards sustainability. During the conversations I have with tyre retreaters, a matter for concern is how well this is understood in its correct perspective by the tyre retreaters. This is particularly common in case of the small and medium scale (SMEs) entrepreneurs in Sri Lanka, although I presume that this is a common feature globally. Yet we have to admire the courage of entrepreneurship shown by the SMEs who operate under several technical and economical constrains. Non availability of technology at affordable prices, inadequate product and processing knowledge, high mobility of labour, and debt burden are some of the key constrains despite which some retreaters are performing a commendable and admirable job. While ISO 9001 based Quality Management Systems are implemented voluntarily by the companies or as a requirement stipulated by the customers, it has become a pre requisite for qualifying to be registered as suppliers of retreaded tyres to the state owned organisations. Very often the SMEs face the dilemma of how to satisfy the certifying organisation in order to demonstrate the conformity status to the requirements. Ironically this situation is exploited intentionally or unaware to the clients by some certification bodies and Consultants whose professionalism leaves much to be desired. I intend to brie4fly highlight the constraints and limitations faced by the SMEs during the successful implementation of the ISO 9001:2015 requirements in their tyre retreading units.

Tyre Asia October/November 2017

The key principles of the ISO 9001:2015 standard encompasses identifying the external and internal issues related to the interests of the stake holders, the Process Approach, the application of the PDCA ( Plan –Do; Check –Action ), and Risk based approach to take preventive action on “what can go wrong” .

Requirement No: 4 Context of the organisation This implies aligning the business strategy in line with the external and internal issues and keeping tack of the changes in the above by periodic reviews. It is noted that most SMEs are single owner or family businesses which has direct exposure to the markets and the prospective clients. Very often business decisions are taken by the owner, based on his knowledge on the issues concerned related to the interests of the stake holders. They are guided more by their tacit knowledge which is rather difficult to be demonstrated to a third party Auditor.

Requirement No: 5 Leadership The SME entrepreneur is closer to the customers and very often personal contacts and communications are informal yet effective. They do not have their vision, mission, values or the Quality Policy documented and displayed, while it is a fact that even in some very large organisations, these have become items of decoration of the walls. On the other hand I have s witnessed one or two medium scale companies, who conduct a daily morning pledge to the Quality Policy. With respect to the allocation of roles and responsibilities, the SMEs have a limited number of personnel and most of them are multi tasked and some multi skilled.

Requirement No: 6 Planning Identification of the risks and opportunities as an input to the quality management and taking preventive action to minimize or mitigate the risks is stipulated in this requirement. Considering the “modus operandi” of the SMEs, mere looking for documentary evidence of risk assessment could be futile, and a more practical means would be to assess the success or failure of the business and the evidence of any improvements in the infrastructure and work methods. With respective to setting up Quality Objectives and monitoring the same documents may not be available. However, it will be good practice to have some simple goals and objectives such as reducing the scrap and reworks.

Requirement 7: Support activities This section covers important resource requirements with respect to competent manpower, satisfactory work environment and infrastructure to realize a quality product, control of monitoring and measuring equipment and managing organizational knowledge and communications. Tyre retreading, which is traditionally considered as a “dirty, difficult and dangerous “ industry, attracts few employees as there are more lucrative opportunities in other spheres. Hence attracting and retention of and maintaining a knowledgeable and competent workforce is a major issue. Labour turnover

hile ISO 9001 based Quality Management Systems are implemented voluntarily by the companies or as a requirement stipulated by the customers, it has become a pre requisite for qualifying to be registered as suppliers of retreaded tyres to the state owned organisations is high and trained operators are in the habit of joining larger companies which offer better employment terms. With respect to the work environment and the infrastructure only a limited number of companies have gone for improved work places and new layouts and most are continuing in the traditional ways. Most SMEs do not have their in-house compound and mixing facilities and depend on external suppliers for their tread rubber and other component requirements. In companies who have their own compounding and mixing machinery and equipment, different levels of managing knowledge and its application are practiced. Very often knowledge is retained in the head of the single owner, and the prospects of the second generation entering the family tradition is receding. Hence auditors may have to do floor level evaluation to establish that sufficient knowledge to manage the operations is available, instead of looking for documentary evidence. Instrument calibration is another area that is new or known but neglected. With respect to internal and external communications

it is noted that the SMEs depend more on informal but hands –on communications

Requirement No: 8 Operational aspects This is the core aspect of the tyre retreading activities,. Product requirements of the customers can be more easily acquired through direct personal contacts and very often the Owner/ Manager is in charge of the marketing function. The requirement of product design and development is not directly applicable because the tread patterns, compound and component specifications are already available and no original design work is undertaken Purchasing of raw materials (rubber and compounding ingredients) is another area of constrain. Very often raw materials are purchased in small lots from the open market , due to constrains on the working capital, which imposes risks and issues of uniformity and consistency of quality of the material inputs. Verification of purchased materials are often confined to visual checking on the qualities and perhaps packaging. In many cases where the mixing of compounds is outsourced , verification controls and supplier quality assurance reports (Test Certificates) are not used. This however is an area that can be established and improved. Production and process controls, inspection testing and verification and control of non conforming outputs, are practiced to different levels and the auditor has to make an onsite easement of the effectiveness of the adopted methods. Some companies obtain the services of independent testing laboratories to carry out random tests on compounds and finished tread or bonding gum.

Requirement No: 9 Performance evaluations In most cases, customer feedback and customer satisfaction documentation are not formally maintained. Product performance is usually gauged by the tyre mileage. In companies which are already certified for ISO 9001, internal audits are carried out by external auditors. However this is a random activity, performed as a requisite to satisfy the Certification Bodies. Same applies to Management Review Meetings as stipulated by the ISO 9001: 2015 Standard. Performance reviews are normally carried as a daily practice, and corrective action is taken on a case by case manner in case of non conformities and some companies have records of non conformities and actions taken. This again is a practice that can be adopted by all SMEs

Requirement No: 10 Improvements It is noted that maintaining records of continual improvements on processes, products and activities is the exception rather than the rule even in some large companies and unearthing objective evidence in this area is a real challenge to the auditors. Tyre Asia October/November 2017

RETREAD SUPPLEMENT

Salvadori Thinks Bigger S

alvadori Srl has been in the Tyre Retreading Business for over 30 years, diversifying his offer and witnessing the market ups and downs. For instance, in the recent years, the Tyre Retreading Industry has been suffering a great crisis and sadly shrinking down. Even if the company is still positively looking at it and believes in its recovery, the question was: “What should we do to keep growing? And how to react to a more and more competitive marketplace with a non-indifferent number of players?” Salvadori’s answer has been: “think bigger.” Meaning: focusing on a market segment that has a lot of

Tyre Asia October/November 2017

potential: OTR Tyre Service and Retreading. The choice was driven by two main factors: Salvadori differentiation strategy and on-field researches. Since a couple of years, Salvadori has been focusing also on the Mining Industry, specifically on the Conveyor Belt Repairs and developing its line of Splicing Tools. While getting closer to the mining environment, the realisation was how huge the demand for these products is and the enormous number of OTR Tyres in the world. Furthermore, already many Retreading Companies had switched or added OTR Tyres

Retread to their process. Hence, Salvadori decision to promote precise tools for this market, which are somehow different or have slightly different specification from the one usually used in Tyre Retreading. Salvadori is now studying what article could be an addition to its product line.

Specific tools The company is already offering specific tools that can be used on these gigantic tyres, such as: customized OTR Envelopes, its best-seller Extruder Gun, which has a dedicated model for OTR Tyres, new and more resistant E.M. Gouge, an Engraving Knife etc. From an ethical point of view, Retreading OTR tyres is a conscious choice that will help companies save money and help the environment by delaying the time when this giant tyres will have to be disposed (but don’t be scared, Salvadori has a solution for that as well!) Furthermore, Mines operations need assistance when it comes to tyres and Wheels Service. Monitoring the tyre status with the right instruments, like TPMS (which Salvadori is now offering) and intervening promptly with the best tools, like the Bead Breaker, can extend the fleet life.

Salvadori Bead Breakers From several years now, Salvadori has launched its Bead Breakers line, with 9 variants for

different tyre types, tyre sizes and rim pieces. With a high-quality made in Italy product, thought to be simple to use and light to handle, the company has addressed the world-wide demand, and it is looking for new opportunities. One of the strength of Salvadori is the possibility to offer customised solution to its customers and fulfilled their different requests. Being the after-sale service in the center of the Company vision and mission, Salvadori offers an aftersale repair service and the complete range of spare parts, listed in the catalogue schematic. Furthermore, on its YouTube channel, people can watch tutorial videos showing the Bead Breakers main functions. Most of Salvadori’s Bead Breakers can be used on Agricultural and Earth Moving Tyres, facilitating the on-site service, where operators are at a Mining site and need a portable tool which is also versatile.

What the future holds For the second half of the year, the Italian company has already a full schedule that will see its sales team engaged in different trade shows: from Indonesia to Dubai, and from Florida to France. Salvadori is already thinking about what to do next and 2018 not to be missed appointments. With reference to its increasing attention to the Mining Industry, the plans are to take part to more Mining Shows, while keeping on exhibiting at the main Retreading ones. Salvadori will be at The Tire Cologne, in May 2018, and probably in South Africa. But these are just some hints. Salvadori won’t stop innovating and granting the quality service that has distinguished it from the competitors. The key is communication, technical knowledge and a trained staff, with a total of ten different languages spoken. Those are also the reasons why the company is wellknown internationally and its brand is synonym of quality and courtesy. The Italian passion won’t stop accompanying you. Tyre Asia October/November 2017

REAR VIEW Anil Mishra is the MD & CEO of National Multi Commodity Exchange (NMCE). He is an expert on commodity trading, supply chain management and trading in derivatives. He is also an international speaker, presenter and writer. The views expressed here are of the author and not that of the Exchange

Anil Mishra

he Exchange of Futures for Physical (EFP) is an alternative mechanism that is used to price any commodity whose derivatives trade on Commodity Futures Exchange. This enables participants to exchange their futures positions for a physical position thus separating the pricing from the physical supply. The EFP trades as a differential between the futures market and the underlying physical market. The value of the differential will reflect the relative value of physical versus the futures at any given time. By transacting an EFP; a physical position is transferred from one participant to another, at the same accepting opposite futures positions. Both participants then advise their brokers to register their transactions with the Commodity Futures Exchange. It is important to note that when EFPs are registered with the exchange the volume is attributed to that trading day price has to be within that days price range but the price is not declared to the market. EFPs can take place in respect of any contract month in any product listed on commodity exchanges. An EFP can be posted up to 1 hour after the relevant time of cessation of trading of the last day of trading on the Exchange platform.

Advantages of EFP: Producers: Producers want to sell when the price is high but at that time producer may not have ready delivery hence he is unable to capture that price in physical market but he can capture that price in the futures market by selling the futures on the exchange where delivery becomes due only at future date chosen by the seller if the position remains open on settlement day. He is thus able to capture that high price even without commodity being ready for delivery. Once his produce (Rubber) is ready and he has his known set of buyers who pay premium for his superior quality goods he would not like to deliver the rubber to the exchange because exchange accepts standard FAQ quality and would not pay any premium, whereas his known buyer pays premium for his quality. In that case he exchanges

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The Exchange of Futures for Physical (EFP) his Sell Futures position with buyerâ&#x20AC;&#x2122;s opposite Buy Futures position on the exchange and then prices his underlying goods like rubber at the differential to Futures market that they had agreed. Thus final invoice value is arrived. This way he captures the best of both worlds, higher price through exchange and higher premium through his preferred buyer. In this case both are hedgers but they used commodity exchange for price risk management and getting better price without making delivery to the exchange. Processors: Processors buy on the exchange when exchange price is very low but at that time producer doesnâ&#x20AC;&#x2122;t have ready delivery or is unwilling to sell at that low price, hence he is unable to capture that price in physical market but he can capture that low price in the futures market by buying the futures where delivery becomes due only if the position remains open on settlement day. Thus he is able to capture that low price. Once his preferred supplier has rubber ready he would buy from his supplier at differential to the exchange price. Differential would be arrived at based on prevailing spot price. Before taking delivery he would now price the contract by giving up his future buy position to the seller who would have taken sell position when the price was high. Thus both of them have squared the position on the exchange and have fulfilled the obligation on the exchange and do not have open position. The producer who had sold the future would now buy the future of his processor client. Thus future positions are being exchanged for the physical transaction. Win -Win for both buyer and sellers: EFP helps both buyers and sellers benefit because it captures desirable price for both buyers and sellers but at different points in time and then marries them suitably before actual delivery is made. Freedom from mark to market: When the buyers and sellers have their open position not for the speculation but for hedging even then they have to pay mark to market to the exchange as long as their position remains open. Once they price their contract through EFP

they get freedom from paying mark to market even if they have to make or take actual delivery at future dates. Any grade can be hedged: Since in EFP intention is to hedge to manage the price risk and capture better price, the stakeholders are not bound by the grade specification of the exchange. Any grade or even derivatives of the commodity can be hedged. The pricing for the superior or inferior grade could be adjusted through premium or discount. For example in case of rubber RSS4 is the standard grade on the exchange in India at NMCE. If one wants to hedge RSS3 or RSS1 which are premium grade he could arrive at the price by charging prevailing premium over RSS4. Similarly if one wants to hedge RSS 5 which is inferior grade to RSS4 he may buy at discount to the exchange price. Thus while on exchange only RSS 4 can be delivered through this kind of mechanism any grade can be hedged and traded. Internationally popular: Internationally EFP is very popular way of trading and risk management between large buyers and large sellers of the commodity. Large multinational buyers and sellers use this method because they originate the commodity from various origins/geographies and sell to their clients all over the world. They are real players of commodity and are involved in the supply chain and do not have intention to give delivery to the exchange or take delivery from the exchange but give delivery only to their clients. They use exchange only to manage the price risk and price their commodity more favourable to them. Useful even to smaller players: This can be used by smaller players also and many stakeholders who are away from the basis centre of the exchange, hence do not actively participate can use this tool. Through this method of EFP they can hedge any grade and even smaller quantity because NMCE has only 1 MT as a lot size. They can make or take delivery any where since they get freedom from delivery despite being hedgers. EFP was being practiced in India under FMC as regulator. SEBI the new regulator has to review it.

TreADMARKS

Rajiv Budhraja

Rajiv Budhraja is Director General of the New Delhi-based tyre industry association, Automotive Tyre Manufacturers’ Association (ATMA).The views expressed here are personal

First things first

recent development made India Inc. to sit up and take notice. The new Minister of Commerce & Industry Suresh Prabhu plans to seek an investment pledge from Indian companies regarding their assured investments over the next few years. Laudable as it is, the step also points to the anxiety on the part of the Government to put the economy back on track. Yet again, it has been proved that India is no longer the fastest growing economy in the world. The first quarter numbers for current fiscal have come as a rude shock. Gross Domestic c Product (GDP) growth has slipped to a three year low of 5.7% in the first quarter (Q1) of FY18. From a high of 9.2% growth in the last quarter (Q4) of FY16, the growth has been slowing for five quarters in succession. There are quite a few areas of concern. Agriculture is hurting notwithstanding good rainfall. Against 4.9% growth in agriculture in FY17, the growth has tapered to 2% in Q1 of FY18. Capacity utilization of the industry is slipping. From 74.6% in FY16, the capacity utilization slipped to 72% in FY17 and further down to 71% in Q1 of FY18. Index of Industrial Production has come down by more than half from 5.2% in July’16 to 2.4% in July’17. All this is enough to prove that the economy has been facing headwinds of late. For quite some time now, the economic growth has relied upon Government expenditure and Foreign Direct Investment (FDI). Private investment has remained sluggish and has gone a long way in dragging the economy down despite the fact that a series of initiatives have been launched by the Government including Make in India besides several reforms. Amongst other challenges, stalled projects have weakened the balance sheets of corporates and public sector banks which, in turn, have affected, both, private investment and banks’ capability to lend. As a result the credit growth of public sector banks has been the slowest in recent times and stressed assets are weighing down on the growth. Unfortunately manufacturing, essential for job creation, has maximum number of stalled projects followed by power. Investment to GDP ratio has been declining. A question being fervently asked is when will the private sector join the party? And that explains Minister Prabhu’s serious efforts to secure investment commitments from domestic firms. In fact an investment war room is being set in the Commerce & Industry Ministry. The government is understood to be keener now than ever before to help overcome the constrains being faced by the private sector.

I am not an economist by practice. However as an industry observer I certainly feel that private investment needs to be incentivized. Especially in sectors like Tyre where the industry has continued to invest against all odds. Just take a look at the unique attributes of Tyre Industry. There has been continuous decline witnessed in Gross Fixed Capital Formation (GFCF) by private sector in India as the global macroeconomic environment remains challenging. However tyre is one sector which has been steadily investing in capacity expansion and technological upgradation. In the past four to five years, tyre manufacturers have invested over Rs 40000 crore (approx. $6 bn) in India in state-of-the-art manufacturing facilities. That makes the sector stand out. Job generation is another major worry for the Government. In that respect also, the job-generating potential of the tyre industry is huge. India has about one million natural rubber growers and another more than a million engaged in tyre industry and its rich and diverse value chain. The Industry has a wide dealer and distribution network extending to remote rural areas across the country thus creating jobs for large number of people. As much as 15% of the revenue of the Tyre Industry comes from exports. Tyre exports from India could be propelled to another level altogether. In fact exports could be doubled in three years with policy support from the Government. The spend on R&D by major tyre companies in India has gone up three fold from 0.6% of revenue five years ago to more than 2% currently. Auto OEMs are no longer importing tyres but are using Indian manufactured tyres for not only domestic market but as export fitments too. It is unfortunate that the Tyre Industry remains one of the less appreciated success stories of Indian manufacturing. The silver lining amidst dampening economic scenario is that a rebound is expected and India may end Financial Year 2017-18 with a growth higher than psychological mark of 7%. The reasons are not hard to come by as some of the negatives that have held up growth are poised to dissipate. For one, restocking post GST will spur industrial production, festive demand will further push sales and thereby production and Government spending in infrastructure will continue to support growth. With Government showing its commitment to activate stalled projects and clean up balance sheets of the banking sector, the investment cycle is likely to be revived soon. However, sectors such as tyre need to be identified and incentivized, on priority, for achieving results in the short term as desired by the Ministry of Commerce & Industry. Tyre Asia October/November 2017

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Reflections

KS Nayar

POLLUTION MOOS

ndian politicians are busy milking the cow for personal gains. They expect that raising the noise against cow slaughter may bring in votes from the radical right who worship cow as mother. I’m not enamoured by the slogans. I would rather look at the contribution the cow makes to the economy. That statistics looks pretty good. India produces milk that is more than the combined production of all countries of the European Union. India has been in the top league of milk producers since 1997. Its 75 million dairy farms – more than anywhere else in the world – have however fewer than ten cows. Scientists say cow ‘emissions’ are creating environmental havoc. It is more damaging to our Planet than CO2 from cars. India is one of the top emitters of carbon dioxide emission, which is the primary greenhouse gases (GHG). Others in the list of worst emitters include the United States and China. Dairy farms are blamed for damaging the ecosystem. What is alarming is that India – a signatory of Paris Climate Agreement – has reported a 4.7 per cent increase in GHG in 2016 compared to the previous year. In contrast the US saw a decline of 2 per cent and China reported a 0.3 per cent decrease. India has vowed that by 2030, it would reduce emissions intensity by 35 per cent of 2005 levels. It has committed to expand renewable energy capacity

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to generate 100 GW of solar power by 2022. It has recently notified that it would eliminate diesel and petrol cars and replace them with electric vehicles by 2030.

global GHG emissions that come primarily from the use of fossil fuels burned for road, rail, air, and shipping. Today, almost 95 per cent of the world’s transportation energy comes

Former Power Minister Piyush Goyal, now Railway Minister, said that “India can become the first country of its size which will run 100 per cent of electric vehicles. We are trying to make this programme self-financing.” It was possible India could give electric car for free (zero down payment) and people could pay for that out of the savings on the petroleum products. “Innovation is possible; it just needs an open mind. You need to think of scale and be honest,” he said.

It is indeed innovation that can drastically slash GHG. Disruption calls for plans by India to have 56.5 per cent of power generation from renewable sources within the 10 years to 2027. Currently, coal and other fossil fuels meet about 70 per cent of the country’s power demand. The energy innovation strategy should be adapted to the dairy farm sector to cut GHG. The biggest emitter of methane is cattle, which contribute to almost a quarter of global methane emissions. India has the largest number of cattle in the world – 300 million. Cattle flatulence and belches contain methane, which scientists say is a more potent GHS than carbon dioxide that causes global warming. The transportation sector adds 14 per cent of 2010

he biggest emitter of methane in India is cattle, which contribute to almost a quarter of global methane emissions. The country has the largest number of cattle in the world – 300 million. Cattle flatulence and belches contain methane, which scientists say is a more potent greenhouse gas than carbon dioxide causing global warming. Dairy farms contribute to the loss of biodiversity

from petroleum-based fuels. You can imagine its negative impact.

Blame the cow Researchers blame the cow as the top destroyer of the environment. A UN report says the world’s rapidly growing herds of cattle is the greatest threat to the climate, acid rain, river poisoning and contamination of drinking water. Food and Agricultural Organisation

study Livestock’s Long Shadow blames the world’s 1.5 billion cattle for 18 per cent of GHG emissions that cause global warming. It is more than cars, planes and all other forms of transport put together. Cattle’s flatulence and manure generate methane that warms our Planet 20 times faster than carbon dioxide. This is besides other cattle produced polluting gases – more than 100 gases that include ammonia, one of the main causes of acid rain. The cow also drinks plenty of water – it takes a staggering 990 litres of water to produce one litre of milk! Those who blame the cattle for ecological destruction should also realise that the GDP that they generate accounts for a global average of 40 per cent of agricultural GDP. It provides a source of livelihood for millions of people, particularly in poor countries. It provides milk and meat that strengthens food security. Debate on GHG emissions from cattle should be in the context of its economic contribution to society, including livelihood support to over 987 million poor people, particularly in rural areas. In terms of nutrition, cattle food products contribute about 17 per cent of energy and 33 per cent of protein to dietary intakes. This comes as a blessing for the underor malnourished people. Let us listen more to the moos of the cow and ignore the political windbags.

MY VISION

It’ll never go flat A tyre that will never go flat would naturally raise scepticism among all the top global companies that are announcing off and on successful development of non-pneumatic tyres. While motoring enthusiasts eagerly wait to pick up a set of tyres that will outlast their vehicles, Morris Corn, President of Scitech industries and Turf Tech, has a vision to produce a tyre that is virtually indestructible. His unique airless tyre, unlike other claims, does not require any special rims. From cars, trucks, golf carts to bicycles, his nonpneumatic tyre could be fitted on existing rims. Moreover, his tyre can be retreaded many times. In an interview to Tyre Asia, he reveals that his tyre is different from all other airless tyres, including the Tweel. TA News Bureau

Morris Corn

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orris Corn, President of Scitech industries and Turf Tech, has been nurturing a vision to commercially produce a nonpneumatic tyre that will remain unique. From his perspective a commercial airless tyre needs to answer all the requirements of a present pneumatic tyre and still be airless.

He envisioned that his airless tyre should provide standard ride and meet all the US Department of Transportation (DOT) tests, create optimal rolling resistance that does not change, be capable of being retreaded over and over again, be able to be produced to compete with today’s tyres, and be able to reduce the cost of the OEM vehicle market.

He worked on his vision to produce a non-pneumatic tyre that will have the advantages such as fitting on a standard rim. Customers should be able to exchange a tyre just like the market does today.

“With our tyre there is no need to carry a spare, no need for a jack, any tyre gauge and warning systems. Our tyre will also address the need for a greener marketplace and a decrease in the need for virgin rubber. Turf Tech

Tire addresses all these issues and has answers for all these points.” For the past few years Morris Corn and his associates have been working tirelessly to commercially develop airless tyres that they claim would eclipse the rest who are on the race to develop non-pneumatic tyres. “Our tyre is different from all other airless tyres because ours will fit on a standard rim, be able to be retreaded and cost about what a pneumatic tyre costs to make. No other tyre can claim this, says Corn in an interview to Tyre Asia as he unveiled his vision.

hat is more, Turf Tech’s tyre would not have problems as in the case of disposal of end of life pneumatic tyres that still face a lot of environment issues. This tyre is eco-friendly because it uses less rubber and less amounts of other thermoplastics. Retreading requires less use of rubber. These points lead to less tyre disposal issues

In 1999 Morris Corn and Murray Mizzrachi formed SciTech Industries LLC as an investment company. SciTech was approached by a Hungarian tyre engineer with the basic spring concept for an airless tyre. The prototypes were crude but they worked. After some additional development SciTech bought the patents and ideas from the Hungarian.

Turf Tech’s tyre will be cost competitive mainly because it requires only three manufacturing processes compared to 36 different steps of operations in making a standard tyre. This itself will help slash the production cost to the bare bone. “Our tyre is made with patented injection moulding equipment and we only use 1-2 kinds of rubber. That makes this possible. This is a much faster process. The extra cost of the composite materials is offset by the moulding process. So our tyre can be made at about pneumatic tyre costs.” When asked whether his tyres would eliminate the use of natural rubber as they are supposed to be moulded in glass-fibre and PET, he said that the fibreglass/ PET composites are used to make the internal construction. “The

A new division was formed, New Tech Tire, to work on the final development. Under the direction of Michael Moon, Vice President of engineering and a composite engineer, new designs were created and patented worldwide. The introduction of thermoplastic composites to tyre created a brand new approach to how tyres are made. A new company was formed Turf Tech Tire LLC to complete the

sidewall and tread are the same rubber as in pneumatic tyres,” he explained. The SUB-X (safe, unfailing, boundless) tyre, as it is described by SciTech, is designed using internal thermoplastic fibreglass composite ribs with a tensile strength of 700,000 psi. The strength of the materials used is greater than that of steel. Referring to the challenges that tyre engineers could face to design the tread that would ensure better wet grip and lower rolling resistance, Corn explained that the tread design and rubber can be the same as today’s best tread and rubber designs. What is more, this tyre would not have problems as in the case of disposal of end of life pneumatic Continued on page 108

development. All patents and designs are licensed to Turf Tech. We contracted with Rapid Composites, a major innovator and producer of composite products, to design and build a manufacturing process for the tyre. The end result is a true nonpneumatic tyre that meets all the needs and wants that the company has aimed at.

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CONNECTING SUPPLIERS GLOBALLY

AutoParts Asia is a Global B2B magazine on Automotive Industry with an objective to connect suppliers globally. AutoParts Asia, under different sections, gives every month news and news trends on the entire gamut of the automobile industry right from Vehicle and Component Manufacturers to Aftermarket players. In addition, the magazine also covers the Allied Industries â&#x20AC;&#x201C; machine tools, pneumatics, hydraulics, automation, robotics, testing equipment, garage equipment, IT, software etc.

www.autopartsasia.in /AutoPartAsia

Read AutoParts Asia Digital Edition on

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/AutoPartsAsia

CALENDAR

MAR 2018

OCT 2017 40th session of ANRPC Assembly Ho Chi Minh City, Vietnam.

October 27, 2017 Contact: Tel: +603 2161 1900 Email: secretariat@anrpc.org

Automotive Aftermarket Products Expo (AAPEX) 2017

The 7th Indonesia International Tyre, Rubber & Wheel Exhibition 2018 JIExpo Kemayron, Jekarta, Indonesia.

March 22-24, 2018 Contact: Tel: 62 21 54358118 Email: info@gem-indonesia.net Web: www. tyre-indonesia.net

Sands Expo, Las Vegas, USA.

October 31-November 2, 2017 Email: info@aapexshow.com Tel: 708 226 1300 Visit aapexshow.com/adv.

Specialty Equipment Manufacturers Association (SEMA)Show Las Vegas Convention Centre, USA.

AUG 2018 Citexpo 2018 Shanghai, China.

August 20-22, 2018

SEP 2018 ITEC 2018 Akron, USA.

October 31-November 3, 2017

September 11-13, 2018

Tel: + 1 224 563 3154 Email:aapexsema@compusystems.com Website: www.semahsow.com

Automechanika Frankfurt 2018

NOV 2017 Automechanika Shanghai National Exhibition and Convention Center, Mesee Frankfurt (Shanghai) Co. Ltd. China.

November 29-December 2, 2017 Contact: Tel: +86 21 6160 8555 Email:info@china.messefrankfurt.com

JAN 2018 Automotive Testing Expo 2018 Organised by UKIP Media & Events Ltd. at Chennai Trade Centre, Chennai.

January 11-12, 2018 For details: Tel: +44 (0) 1306 743744 Email: expo@ukimediaevents.com www.testing-expo.com/india

FEB 2018 14th Auto Expo Components 2018 Pragati Maidan, New Delhi, India.

February 8-11, 2018 Contact: Rachna Jindal (Ms) Director, CII,Ph: +91 124 4013871 (D); 4014060-65, Fax: +91 124 4014080,Email: rachna.jindal@cii.in Website: www.autoexpo.in www.gamingshow.in; www.cii.in

Tire Technology Expo 2018 Hanover, Germany.

February 20-22, 2018 Contact: Colin MacDonald Scott Sales & Marketing Director Tel: +44 (0) 1306 74 3744 Mobile: +44 (0) 7956 671 663 Emil: scott@ukimediaevents.com www.tiretechnology-expo.com

NRC (ER) & Intemational Conference and Exhibition on Polymers (ICEP) 2018 Guwhati.

February, 23-25, 2018

Frankfurt, Germany.

September 11-15, 2018 RubberTech China and Tire Plus 2018 Shanghai, China.

September 20-22, 2018

OCT 2018 Asian Retread Conference 2018 Sime Darby Convention Centre, KL, Malaysia.

October 2-3, 2018 Contact: Antony S Powath, President, ABM Mobile: +91 9833 901586, Email: asp@abm.net.in Web: asianretreadconference.com.

DEC 2018 Asian Powertrain Conference 2018 Chennai, India.

December 2018 Asian Business Media LLP, Registered/Marketing Office, 50/502, Imperial Plaza, Croner of 27th & 30th Road Near Nilgiri Garden, Bandra (W) Mumbai - 400 050 Ph: +91-22-2640 0829, 26 40 0735 Fax: +91-22-2641 189 Email: asp@abm.net.in Website: rubberasia.com

JAN 2018 India Rubber Expo 2019 10th International Exhibition & Conference Bombay Exhibition Centre (NESCO), Mumbai. All India Rubber Industries Associations, Andheri (East), Mumbai - 400 099

January 17-19, 2019 Tel: 022-2839 2095/ 2107 Fax: 022-28229883 Email: info@allindiarubber.net www.indiarubberexpo.in

Tyre Asia October/November 2017

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Continued from page 105

It’ll never go flat tyres that still face a lot of environment issues. “Our tyre is eco-friendly because we use less rubber and less amounts of other polymers. Retreading requires less use of rubber. These points lead to less tyre disposal issues.” Retreaders do not need to worry about damage to the carcass that could lead to blow out because in Turf Tech’s tyre there is no air. “It doesn’t even matter if my tyre has a hole in it. You not only can retread it once, you can retread it multiple times and not have a blowout because it can’t—there’s no compressed air in it.”

Feeling upbeat Corn is upbeat about his tyres when used in fleet operations. “Fleet companies will love the idea that they can retread tyres over and over even with blemishes. The fact that the tyres have a built in tyre size that never changes will give a trucker constant minimum rolling resistance. Besides all these unique advantages, the truckers don’t have to buy special rims.” The Turf Tech’s tyre would come in all sizes, including those needed for driverless cars and autonomous vehicles. It weighs similar to pneumatic tyres. “Our patented technology allows us to build all size tyres, bicycle to mining tyres.” He is sure that his tyre will have demand worldwide and is in the process of firming up investments. He has already received $2.2 million in the first round of the start up operations. “We are open to all discussions with strategic tyre manufactures and venture capital firms.” The composite rib and tyre construction are covered by world wide patents. Moreover, the commercial versions of the Turf Tech Tire will create a new tyre for almost anything on wheels, from garden tractors to the largest off the road vehicles. Corn affirmed that his tyres offer many benefits to

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the manufacturer and the consumer. These include better fuel economy, as much as 2 per cent or more. As there is no need to carry spare tyres, jack or tools the vehicle weight will come down considerably contributing to more mileage. As there is no sidewall warpage, the driver can have quicker vehicle handling that results in superior safety. He said the compositesupported airless tyre can never be underinflated or overinflated. It also prevents heat buildup, and can sustain multiple impacts from road hazards — even from ammunition rounds. This is because out of an average 100 springs per tyre about nine are supporting load from the road at any given time. Thus, even the loss of several springs is not enough to cause failure. Corn said the investment in manufacturing this unique tyre will be minimal as making TTT tyres requires much less equipment and space. It requires only three or fewer rubber compounds, a cost saving in itself. There are no calendered belts, and there is no need to have any specialised or expensive materials. Corn’s business strategy is to build commercially proven airless tyres through the beta stage and then licence the IP to tyre manufacturers. “We are now about 80 per cent to achieve this goal. We also have an on going IP material development as well as development of injection moulding process which is a separate business in itself.” Corn is outspoken when he said the tyre industry is a dinosaur. There has been no inventive change since the radial tyre. It has trouble understanding composite material in the springs that are in his tyre. As long as this attitude continues, the consumer really doesn’t have a choice. He thinks the disruption that he is going to come up with will shake up the tyre industry.

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