Specialty chemicals company LANXESS is selling its chrome chemicals business to Brother Enterprises, a Chinese leather chemicals producer. The transaction is still subject to approval by the relevant antitrust authorities. LANXESS expects to complete the planned transaction by the end of 2019.
LOS ANGELES — A U.S. private equity firm that recently acquired has now reached an agreement to buy , the data analytics and consumer intelligence firm that also has close ties to the auto industry. Equity firm Thoma Bravo, with offices in San Francisco and Chicago, that it expects the transaction to acquire J.D. Power to close by year end, subject to customary closing conditions. Terms were not announced.
WORCESTER, Mass.—Vystar, manufacturer of Vytex deproteinized natural rubber latex, has signed an agreement to purchase Murida Furniture, dba Rotmans Furniture and Carpet.
BATESVILLE, Ind.—Hillenbrand Inc., the Batesville-based parent company of compounding extruder maker Coperion and auxiliary equipment firms K-Tron and Rotex, is buying Milacron Holdings Corp. in a cash and stock deal valued at about $2 billion.
Executives of both companies said one key area will be in extruders, making a combined, stronger and more diversified company.
K&M Tire, Inc., headquartered in Delphos, Ohio, has purchased Cadillac Wholesale Tire, located in Cadillac, Michigan. This purchase will be effective July 15.
Cadillac Wholesale Tire was one of the Michigan’s leading distributors of passenger, light truck, truck and farm tires, K&M says.
The company has entered into an agreement to merge its defense business and other operations in Acton Vale, Quebec, with Critical Solutions International Inc., a privately owned Charleston, S.C.-based global supplier of route clearance vehicles, countermine and survivability products to U.S. and foreign military forces.
Fiat Chrysler Automobiles proposed a merger with Renault that would create the world’s third-largest carmaker. The eroding economics of the industry make such deal more likely by the day. Deep trouble at Ford Motor and General Motors’ need for more heft to compete with rivals Toyota and Volkswagen make a marriage between the two largest car companies increasingly probable.
Fiat Chrysler argues that a tie-up with Renault will lead to $5.5 billion in savings. As car sales have flattened in the United States and started to drop in China, the two largest markets in the world offer less hope for revenue improvement. Neither company has much of a sales footprint in China. Renault has none at all. Both have a strong market share in Europe, but it is one of the most competitive markets in the world. At the low end of the market, VW is the dominant force. At the high end, it is BMW and Mercedes.
The need for more automation and faster size changes in tires over the last couple of decades has led to an industry manufacturing transformation. This transformation has changed factory design and driven changes in tire building machines, process equipment and tires themselves. Some changes are the result of regulations, heightened OEM and consumer performance requirements, and new tire materials. These improvements in tire manufacturing and others are detailed in the new Smithers Rapra market report The Future of Tire Manufacturing to 2024.
Improvements in manufacturing processes have been ongoing since the first tire factories and have accelerated over the last decade – spurred by the increased focus on environmental issues. The construction of new factories will help meet growing demand and handle new equipment more easily. Advances in automation have also helped significantly, although there are still significant savings to be realized, as well as increasing environmental regulations with which to comply. These together mean that improvements in manufacturing efficiencies will continue to be a focus for tire companies.
Developments affecting tire plants and manufacturing processes are as diverse as the penetration of new vehicle powertrains, logistical burdens, emergence of new markets, mergers and acquisitions, and the increased value and scarcity of real estate.
Tire demand and industry growth are driving manufacturing expansion at both the regional and global level. Distribution of tire manufacturing capacity and production across the major regions of the world is shaped by local tire demand from OEM and replacement market customers and favorable costs of the production factors.
Tire manufacturers tend to establish local factories in their most important sales areas, most recently focusing on Asia, according to The Future of Tire Manufacturing to 2024. The reverse is also happening with Asian producers setting up production close to customers they consider important, such as US-based OEMs. For this reason North American tire manufacturing is showing growth while the mature European market with lose share over the coming five years. Raw material prices are very similar all over the world, but labor and energy costs vary by region or country.
Tire demand drives manufacturing
Global tire demand is the ultimate driver of tire manufacturing, with both vehicles in use generating ongoing tire wear and replacement needs, and new vehicle sales requiring OEM tires to be fitted. Overall global tire demand is expected to grow 4% per year in unit terms in 2019-24.
The global tire industry as measured by tonnage of production is estimated to be 19.25 million tons in 2019, and is anticipated to grow at a 3.4% compound annual growth rate through 2024, to 22.75 million tons.
This growth is being driven and shaped by a variety of economic, technology and regulatory, demographic and consumer trends at the global, regional and national level, including alternative powertrains and autonomous vehicles, improvement in materials including sustainable substitutes and changing customer requirements like greater fuel efficiency with reduced emissions. There is a continuing high-performance trend towards larger OEM tire sizes/rim diameters, as well as ongoing pressure on automakers to meet emissions and fuel economy standards for individual vehicles as well as fleets, while tire companies adapt to consumer labelling schemes in Europe and increasingly, elsewhere.
Influence of vehicle mix and design
Trends in both conventional and emerging segments of motor vehicles have a critical influence on tires requirements and manufacturing, requiring a lot of planning and flexibility. For instance, a continuing shift towards light trucks away from passenger cars in developed markets coexists with growth in developing markets in entry level vehicle segments. The shifts at the OEM level have been underway for years, as seen by the continuing high growth of higher performance vehicles as well as eco-friendly vehicles and fleets.
Changes in tire types and design
A tire’s key required or desirable characteristics include safety, reliability, wet and dry traction, snow performance/wet performance, handling, high rolling efficiency, noise and life (miles)/longevity. New tire developments are constantly occurring, and there are substantial changes every year. Tire attributes in flux include tread/shape, material types and material chemistry, among others, and that does not even include the many concept tires.
Tire makers have made their primary commitment to produce ever more technically advanced tires (e.g. with sensors to measure tread depth, temperature and provide real-time alerts to drivers), run-flat tires including self-sealing tires, self-inflating tires, air-free tire technologies, and reduced noise or noise-dampening tire technology (important for quiet electric vehicles).
Technology impact on tire manufacturing to produce these technically advance tires includes new molds, laser carving tools, new test equipment (especially for noise), as well as material changes such as different resins, silicas, and aramid fiber.
EV tire requirements
Use of electric vehicles (EVs) is on the rise and one obvious effect of the uptake of electric powertrains is the increased complexity of tire varieties. This includes the further SKU (stocking unit) proliferation from increased variation in OE tire types and sizes. Tire wear concerns with EVs make higher wear resistance critical, since traditional tires wear 30% faster on EVs than on conventional vehicles.
EV tires require optimized footprint shape and contact pressure distribution to avoid irregular wear. Maximizing battery range requires continued reduction of rolling resistance, and the additional weight of EVs may require even lighter weight tires. Quiet electric vehicles require emphasis on noise reduction on top of existing pressure from labeling schemes.
AV tire evolution
Many EV tire changes also apply to autonomous vehicles (likely to be all or mostly electric), but the introduction and spread of autonomous driving means that further changes are emerging and will have to be scaled up alongside more traditional manufacturing.
Tire sensing and communication capabilities are emerging at OE and aftermarket levels. Various types of tire condition and wear sensors and intelligent tires are in development, with some approaching market readiness in advance of the big future shift to autonomous vehicles.
Autonomous self-steering cars will mean that tire-vehicle communication becomes more important meaning tire sensors will be needed. Connected tires will contribute to road sensing, vehicle operation, and predictive maintenance (wear/damage sensing).
Emphasis on low noise and high ride quality will increase. Reliability requirements may be higher, increasing potential market for run-flat tires and eventual non-pneumatics. As AVs become the norm, the light vehicle tire may characterized by their tall and skinny shape (for aerodynamics and other attributes), sensor technology, no speed rating (driving speeds will be programmed and limited), better ride and less NVH (noise, vibration and harshness), ultra low rolling resistance (improving fuel economy), possible run-flat technology (if it can be lightweight enough) and labeling for compatibility.
For more information about the Smithers Rapra market report “The Future of Tire Manufacturing”, visit: https://www.smithersrapra.com/market-reports/tire-industry-market-reports/the-future-of-tire-manufacturing-to-2024
Janine Young is a career b2b communications professional with a background in trade journalism, corporate communications and public relations. She is a member of the Smithers Rapra reports and consultancy team that publishes market reports for members of the tire and rubber industries. She is editor of the Smithers Report, a subscription news service that focuses on tire and rubber industry trends and technology.
STREETSBORO, Ohio—Compounding firm Aurora Plastics L.L.C. shows no signs of slowing its growth after purchasing Elastocon TPE Technologies Inc., Aurora’s fourth acquisition in two years.
For Aurora, acquiring Springfield, Ill.-based Elastocon “increases our presence in thermoplastic elastomers and allows us to build on an existing franchise,” CEO Darrell Hughes said.
AKRON — 2018/19 will go down as one of the commercial tire industry’s most active periods in terms of mergers/acquisitions, with as many as 75 points of sale/service and 14 retread plants changing hands over the past 12 months.
Topping the list are Southern Tire Mart’s pending acquisition of 46 GCR Tires & Service commercial tire locations and six retread plants from Bridgestone Americas Inc. and Bauer Built Inc.’s acquisition of the tire division of Allied Oil & Tire Co. — seven outlets and one retread plant in five states.