Securing supply is the new challenge for European rubber industry

With tire producers facing materials-supply challenges on many fronts, Europe’s rubber compounders need to look for long-term solutions that are more resilient to unforeseen disruption. One way to achieve this is by searching for solutions closer to home, suggests Dr Herbert Fruhmann, global accounts manager of Nynas AB:

The Covid-19 pandemic created disruption to global supply chains unlike anything seen in decades. Congested ports, costly transport and emergency shipments became widespread.

Then came Russia’s invasion of Ukraine. In addition to a humanitarian crisis and enormous human and economic costs, the war intensified supply-chain problems in many European industries, resulting in product-line closures, transport disruption and spiralling input costs.

The established model of supply-chain reliability and efficiency seems have broken down, with procurement managers finding themselves with a brand new set of challenges. To restore resilience, companies will need to consider a range of options to secure stable supplies in the long-term.

The tire industry is no exception, and the supply situation for numerous raw materials used in tyre production presents significant challenges for manufacturers.

In addition to supply pressures following the Covid-19 pandemic, trading flows related to the tire industry have changed substantially as a result of Russia’s invasion of Ukraine and the Western sanctions against Moscow.

The conflict has had an impact on the supply of key raw materials, such as carbon black, butyl rubber and not least tire oils. This triggers a need for approval of alternative raw material sources.

Following the numerous global supply bottlenecks in recent years, many European tire producers are now moving production back to the continent.

Tire companies with capacity in Russia are reviewing their manufacturing platforms, with one recent example being Nokian’s announcement that it will build a new plant in Romania to replace its Russian operations.

Other tire manufacturers with production in Russia are trying to sell their facilities there, and it is consequently reasonable to expect that they will also look to increase their production capacity at various European locations.

Nynas expects this trend to potentially result in a further tightening of the supply of tire oils and other raw materials in Europe in the coming years.

Especially as we are also seeing several companies from the Asia-Pacific region setting up manufacturing in Europe. Toyo, Sentury and Linglong are recent examples, following the footsteps of Hankook and Nexen.

To continue reading see the full report in the January/February issue of European Rubber Journal magazine – online version also available in the Featured Content section under the Focus tab on the ERJ website homepage.