ERJ Business Briefing: May/June

Tracking the latest announcements and new business developments in the global rubber and tire industries...

UK graphene technology firm Levidian is working with materials scientists at Avon Protection to "assess the impact of graphene in a tire tread formulation, where positive findings have been obtained." Further work is now planned to look at applications in tire sidewalls and inner liners, as well as other rubber formulations. Levidian recently unveiled a prototype truck tire with a new tread formulation said to reduce rolling resistance by around 23% and improve fuel efficiency by 3-4%.

The UK government has been urged to reform its “dated” plug-in truck grant, introduced eight years ago, in order to support the sector in developing new-zero emission truck technology. The 2016 grant scheme seeks to help operators switch from conventionally fuelled heavy commercial vehicles to zero emission alternatives, according to the Society of Motor Manufacturers and Traders. However, models can only be eligible after undertaking an approval process that takes around two years, said the industry body.  Read more

MARGMA president Oon Kim Hung comments on US tariff hike on Chinese goods: "Though the news may bode well for Malaysian rubber glove players, we do not expect much immediate impact, as it will only take effect in 2026. About 35% of our rubber glove exports are to the US market, contributing approximately RM4bn in 2023. However, we should not forget that the US also has its own domestic production. We believe that Malaysian producers should continue to invest in ESG matters, and the way forward is to establish sustainable and equitable prices.”  Read more

Indian chemicals supplier SRF Ltd has reported a 9% year-on-year increase in fourth quarter revenue within its technical textiles business. The unit, which among other products manufactures nylon tire cords, reported sales of INR4.7 billion (€52 million) during the quarter ended 31 March, up from INR4.3 billion reported last year. Segment’s operating profit increased 44% to INR700 million. During the quarter, the business witnessed volume growth in the nylon tyre cord fabrics and the polyester industrial yarn segments.

Avon Protection has been awarded a contract to for the continued supply of the general service respirator (GSR) for the UK ministry of defence (MoD), the manufacturer has announced. The award builds on an earlier contract in place since 2018 and ensures the supply of ‘chemical, biological, radiological and nuclear’ respirators to all branches of the UK armed forces. The contract, over four years, with five further 12-month option periods is valued at up to £38 million (€44 million), Avon Protection said 9 May. Read more

AirBoss of America has been awarded a contract valued at up to $45 million (€41 million) to provide its ‘Bandolier’ pre-packaged explosive charge to an unnamed NATO partner nation. Subject to satisfaction of customary conditions, deliveries under the contract are expected to commence in the second half of 2024 and continue through to the end of 2025. ‘Bandolier’ is a lightweight and modular energetic system that can be employed across mobility, counter mobility, and survivability mission profiles.

French chemicals supplier Arkema SA has agreed to acquire Dow’s flexible packaging laminating adhesives business. The Dow business, which manufactures adhesives for the flexible packaging market, generated annual sales of around $250 million (€232 million), Arkema announced 2 May. The proposed acquisition will significantly expand Arkema’s portfolio of solutions for flexible packaging, enabling the group to become “a key player in this attractive market”.

Trelleborg has finalised the previously announced acquisition of pipe-repair specialist BP-Tech Group. Based in Rajamaki, BP-Tech Group specialises in ‘trenchless pipe repair’ including liners, resins and equipment. The Finnish group reported sales of just over SEK220million (€19 million) across 24 countries in 2023.  Read more

Hankook's acquisition of thermal management systems supplier Hanon Systems "increases diversification but raises leverage,” according to Moody’s Ratings. The proposed purchase, it said, will significantly enhance the tire maker's scale and business diversification but weaken profitability due to Hanon Systems' high financial leverage and moderate profitability." The focus will be on how Hankook "balances Hanon Systems' business growth against its elevated financial leverage and achieve synergies between the two somewhat distinct businesses."  Read report

Global production of chemicals increased in the first quarter of 2024, due largely to a positive industry trends registered in February, the VCI has reported. Combined production of chemicals and pharmaceuticals grew 3.5% globally, reflecting a 6.1% year-on-year increase in chemicals manufacturing and 4.8% decline in the pharma sector.  Read more

Dutch startup Meridia has closed a 'series A' funding round, securing €5.2 million from new investors to scale up its data-verification technology. The funds will accelerate the commercialisation of the ‘Meridia Verify’ system, which enables companies to “accurately assess and mitigate risks" related to agri-commodities including rubber.  Read more

Italian tire distributor Magri Group and Sri Lankan heavy tire manufacturer Global Rubber Industries (GRI) have entered a strategic partnership, with particular focus on farm tires.  Read more

Injection moulding machinery supplier Engel “remains cautious” about prospects for its financial year 2024, started 1 April. A "high order backlog has so far let us get off with a black eye,” commented group CEO Stefan Engleder in a 21 April statement. However, according to the Engel leader, these orders are “nearly exhausted” at the injection moulding machinery maker.  Read more

ExxonMobil Chemical is to closing the primary chemical production unit at its Gravenchon site in France, reporting that the unit has lost over €500 million since 2018. The plan, presented in April to employees involves shutting down the steam cracker and related derivatives units and logistics facilities.Full closure of the facility in Port-Jerome-sur-Seine, Normandy, is expected to impact 677 jobs, which will be reduced over time through 2025.  Read more

Dutch tire machinery maker VMI has seen rising demand for smaller production runs, due to the "ever-increasing variety of tires available." As a result, the company has developed gear pump extrusion ‘Unixx Belt Maker’, designed to support small batch production, said VMI in its latest sustainability report. The first such machines are now in operation at “some of Europe’s leading tire manufacturers,” said report, issued earlier this year.  Read more

More items to follow...

Business Briefing - March/April