Tokyo -Â Bridgestone Corp. has published its annual report for the year ended December 2006. The report is titled, Perfection in Progress.
Shoshi Arakawa, (pictured) chairman of the board, CEO and president, says in the opening page that Bridgestone faces three key trends: "First is the sharp increase in the cost of the raw materials used to make tyres and our other rubber products." Arakawa notes that, "The cyclicality that used to prevail in commodity pricing has faded, replaced with unprecedented volatility."
The second trend, he notes, "is an increasing polarisation of the global tyre market." He said the tyre market, "has traditionally been divided into three segments: a high-value-added, high-performance category; a general-purpose tyre category; and a zone in the middle. Today the market is growing at both extremes while the middle is being squeezed." Arakawa noted that Bridgestone has traditionally had a strong presence in the high-added value end of the market, but that Bridgestone must maintain its presence in the increasingly competititive mid-range secnt, if it is to remain the world's biggest tyre maker.
Third, said Arakawa, "we are facing a fresh surge in supply from tyre manufacturers based in the developing countries." He noted that these companies are mainly in the low-end segment, but warned, "This has led to fierce price competition worldwide, which is an ongoing trend in this segment of the tyre market. We recognise that these firms can develop and grow into formidable rivals, particularly in the general-purpose tyre category."
Arakawa added that the comapny will continue and extend its policy of vertical integration, both on the supply side, and on the retail and sales sides of the business.
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Downloade annual report (1100 kb .PDF file)