Original article published in the March/April edition of European Rubber Journal magazine
After two relatively lean years, major players are back on a strong growth track in most markets worldwide, ERJ’s Tire & Rubber Machinery Survey 2018 shows
Last year saw a significant improvement in the business performance of the international tire & rubber machinery sector, with double-digit sales gains recorded by most manufacturers.
There was a 15.5% year-on-year increase in sales across the companies who responding to ERJ’s survey of suppliers of manufacturing equipment for the tire and rubber products industries – both this year and last year.
Combined sales for the 36 repeat respondents totalled $3,765.0 million, compared to $3,256.4 million in our 2017 survey. Indeed, the gains reverse a downward trend seen over the last two years, which has included marked declines among many of the larger players.
Overall, the improved sales figures confirm the high levels of business optimism recorded in last year’s survey when 76% of respondents said they planned to expand and 55% to upgrade/modernise their facilities. This buoyancy, however, may now have peaked, judging by the significant fall in the number of people ticking the latter option on the 2018 survey form (see chart 4).
While there is little change at the top of the survey ranking by sales, with the HF Group (Harburg-Freudenberger Maschinenbau GmbH) holding on to top position. However, the gap between HF and its closest rivals has narrowed, despite business growth of almost 10% at the German group.
With annual sales coming in more than 19% above prior-year levels, VMI has continued its steady push towards top position in the rankings.
Then there is the resurgent Mesnac, which is clearly recovering from what had been a steady decline in business, since it took top position in our ranking of machinery makers by sales in 2015.
Based on figures supplies by the Chinese Rubber Machinery Association (CRMA), Mesnac sales lifted by a massive 58% in 2017. This compares to a fall of around 35% a year ago, suggesting recovery has taken hold among its customers, both in China and overseas.
The CRMA figures cover Mesnac rubber machinery business only. Figures from Mesnac for the group as a whole – including products other than rubber machinery – put the Qingdao-based group’s sales for 2017 at $399 million, 40% higher than last year.
Overall, the Chinese rubber machinery sector contributed to the general upswing: sales for 14 companies – for which CRMA provided figures both this year and last – rose 19% year-on-year to total $1130.7 million for 2017.
This suggests that there has been a significant return to growth among Chinese machinery producers after three fallow years following the imposition of tariffs on exports of tires from China, particularly to the US.
This year’s survey, therefore, again confirms the findings from 2017, when 42% of respondents identified China as a fast-growing region for their rubber machinery businesses. Moreover, optimism about prospects for the Chinese market has increased to a 46% rating among respondents this year (see chart 2).
By contrast, much of last year’s positivity about prospects in North America seems to have dissipated: the region being rated as a fast-growing market by 46% of companies, compared to 73% a year ago. This is surprising given the recent project announcements in the US, and may reflect wider concerns about political and economic developments across the Atlantic.
Interestingly, western Europe was identified as a fast-growing region by 42% of respondents, compared to just 38% for central and eastern Europe – up respectively from 40% and 27% in 2017. Meanwhile, sentiment around the rubber machinery market in India, at 46%, came in just slightly above last year’s level.
In terms of market sectors, the tire industry increased its position as showing the best prospects for business growth in 2018 – up several points to a very dominant 75% in this year’s ERJ survey.
Looking at some of the top players, HF parent group the Possehl Group reported a significant contribution to profitable growth by its ‘elastomer plants’ business unit in 2017.
The tire & rubber machinery business benefited from a “booming global automotive business,” Lübeck, Germany-based Possehl stated in a press statement about its financial results.
VMI’s parent group TKH, meanwhile, reported higher orders for its manufacturing systems sub-sector, which includes the tire and rubber machinery makers.
Increased orders were driven by both the continued recovery in order intake from China and growth in the market share among the top-five tire manufacturers, TKH reported in its 2017 results statement.
“The share of engineering increased significantly because we sold a relatively high number of newly developed machines… and due to client-specific developments for the top-five tire manufacturers,” added TKH.
Looking forward, the Dutch group said higher orders combined with new machines and the increased penetration among the major tire makers “will require a relatively high level of engineering activity, but also offer [prospects] for growth.”
View from Japan
Ahead of its full-year financial results, Kobe Steel expects a significant year-on-year increase in annual sales, company executives said in an interview at the recent TTE trade show in Hanover, Germany (see report p23).
Kobe Steel sees markets for its tire & rubber machinery recovering in China, stable in Europe and “positive” in North America, reported Hiroki Toyoizumi, sales & marketing manager, industrial machinery of the Kobe Steel’s Machinery business unit.
Another robust performance was seen in Turkey, where Uzer Makina is this year set to increase the number of production plants from two to four.
The expansion projects will see Uzer Makina separate its production of tire-curing moulds and tire-curing presses by moving manufacture of the latter machines into a plant beside its headquarters site in Kocaeli.
Uzer Makina said that it had also acquired its fourth plant, located in Aksaray, Turkey which will be mainly used for maintenance activities (see also report p37).
At Rodolfo Comerio, business is currently running at a higher level than last year, according to the Italian company’s sales manager Nicola Fedele.
The rubber market, he added, was “stable earlier last year but now is going up. At the start of last year, we discussed and defined many technical specifications with customers and now they are ready to finalise the order.”
Asked about regional market trends, Fedele said: “Europe was positive last year, with many customers requiring new solutions, new machines... we received many orders from northern and eastern European countries.”
The Chinese market, he said, was “a little bit slow” last year, maybe because of tariffs. But, he added, “now they are starting to come back into the market and we have many enquiries from China.”
Carter Brothers, meanwhile, reported that the company is relocating its manufacturing operations to a more modern and larger facility.
“The move will allow us to increase production and offer new products, the Rochdale, UK-based company said in comments provided with its ERJ machinery survey form.
In its comments for this year’s survey, Pelmar Engineering said: India and Sri Lanka are now “coming back as important markets.” By contrast, it reported that previously noted growth in Thailand had subsided.
Interestingly, Pelmar went on to stated that Central America looked set to become the No. 1 growth market for 2018. Turnover in the region is expected to increase by more than 25% this year, the company said.
“We are expanding our engineering and upgrade capabilities, which will require additional space and manpower,” Pelmar went on to report. The company added that it is also in negotiations to acquire two plants related to the tire and rubber industry.