Global Top 50 Rubber Product Manufacturers 2023

Having largely shaken off the business impact of the Covid crisis, the global rubber-product manufacturing industry was last year pegged back by economic woes in key world regions.

Analysis of companies featuring in our Global Top 50 study this year and last, shows that combined sales among the Top 50 rubber product makers reached $81,703 million in 2022. representing a 1.4% year-on-year decline – in contrast to an increase of around 18.0% recorded in the same survey last year.

But the overall downtrend masks some considerable variations in the performance of the Top 50 suppliers – both in terms of geographic market region and end-user sector.

Sales among European-based rubber product manufacturers actually grew 6.6% year-on-year in 2022 to reach a total of around $35,100 million – just slightly off the pace of their North American counterparts, who registered year-on-year growth of 6.9% to $23,860 million.

The gains in the two main industry blocs were, however, offset largely by significant reversals elsewhere, not least in Japan: combined 2022 sales among Japanese-based rubber-component manufacturing groups came in at $15,770 million, 7.8% lower than the previous year.

Meanwhile, it is worthwhile comparing these results with the stronger year-on-year growth performances last year, when combined sales among companies headquartered in Europe, North America and Asia grew by 10.6%, 16.2% and 10.1% respectively.

Europe dominant

Amid some challenging market dynamics, Europe maintained its clear dominance as a base for global rubber-product manufacturing groups, with three players in the top five and 17 in the top 50.

Weinheim, Germany-based Freu- denberg Group emerged as the world’s largest manufacturer of non-tire rubber products with sales of $7.1 billion in 2022 – representing an estimated 60% of overall group revenues.

Supplier of sealing, vibration-control and medical systems & products Freudenberg maintained a clear lead over Hanover, Germany-based ContiTech in second place with estimated global non-tire rubber product sales – largely automotive components and industrial belts – of around $6.2 billion.

French group Hutchinson SA retained third position with global sales of about $4.6 billion.

Further down the table and making its debut in the global rankings this year, Holcim Group came in at No. 12. spot with estimated global rubber products sales of about $2.2 billion.

According to Swiss-based Holcim, its Building Envelope division is on track to achieve $4 billion in global sales by 2025, under the group’s ambitious expansion plans.

This follows the Zug, Switzerland construction materials and products company’s April 2021, $3.4-billion acquisition of Firestone Building Products from Bridgestone.

Pressure on margins

But while sales largely held up, increasing costs for energy, materials and labour in 2022 made it difficult for rubber component makers to maintain profitability at prior-year levels – a trend that has continued into the current year.

In a “difficult” trading environment, market leader Freudenberg, proved more resilient than most: posting a 7% year-on-year rise in operating profit to Ä942 million, on 2022 group-wide sales 17% higher than in the prior year.

Aside from the impact of the war in Ukraine, Freudenberg “had to grapple with disrupted supply-chains, high inflation, and the availability of energy and raw materials.”

“We have handled the current challenges well so far,” said Freudenberg Group CEO Dr. Mohsen Sohi. “Freudenberg is growing profitably, investing heavily, and driving the energy-transition.”

“Our business success enables us to invest in the future of the company – in R&D, machinery and equipment, and the technologies of the future,” added Sohi, noting that Freudenberg had increased R&D spending by 15% to Ä577 million in 2022.

In its outlook for 2023, however, Freudenberg forecast economic and political uncertainties to continue, commenting: “Challenges and risks are emerging, sometimes exacerbated by the war in Ukraine and the Covid 19 pandemic. These include the energy supply, raw material bottlenecks, price increases, suppliers’ delivery problems, and labour shortages.”

On the other hand, Hanover-based ContiTech delivered an impressive 31% increase in adjusted earnings to Ä109 million, on 10% higher sales of Ä1.73 billion in the first quarter of 2023.

ContiTech linked the improved earnings to the “stabilisation of production processes” and price adjustments due to inflation. Pricing, it stated, more than offset the Ä75 million negative effect of higher labour, logistics and energy costs.

For 2022, however, ContiTech reported a 42% decline in earnings to Ä486 million on 11.5% higher sales of Ä6.6 billion – business performance being significantly impacted by price rises for important raw materials and high energy and logistics costs.

Price increases for automotive OEs and in the industrial and replacement business were the main contributors to the uptick in 2022 sales at ContiTech. Furthermore, demand for conveyor belts and air spring systems for commercial vehicles was “brisk”.

However, earnings within non-tire segment were hit by “higher production costs, the unfavourable sales development of products with lower profitability, and pandemic-related business restrictions in China.”

Looking ahead, ContiTech’s parent group also foresaw “significantly higher costs for materials, wages and salaries as well as energy and logistics” in 2023.

After a “record” 2022, in which sales and earnings (EBIT) rose 27% and 30% year-on-year respectively, Trelleborg reported a “good start” to 2023, with double-digit gains in first quarter sales and earnings – though the group expects business to slow down compared to the strong prior-year.

In a 27 April first quarter results statement, Trelleborg president and CEO Peter Nilsson noted a ‘balanced’ cost inflation, although operating margin fell to 16.2%, from 17.3% reported the year before.

Nilsson linked the lowered profitability to the acquisition and ongoing integration of the US-based Minnesota Rubber & Plastic, which was not part of the group during the first three months of last year.

Once integrated, Trelleborg expects Minnesota Rubber & Plastics to achieve synergies and yield “gradually higher profitability over the next few years.”

Growth markets for Trelleborg Industrial Solutions included LNG, marine, automotive and aerospace, while Trelleborg Sealing Solutions reported a ‘considerable increase’ in deliveries to healthcare & medical and the aerospace industry as well as “healthy growth” in sales to the automotive industry, particularly in Europe.

Summarising the first quarter, Nilsson said: “Compared with the preceding year’s strong growth, it is clear that we are now entering a more normalised growth phase.” The group, he added, had “already seen more subdued demand from the construction industry and some industrial market segments.”

Elsewhere, Swiss group Datwyler Group reported pressure on its earnings margins in 2022, due to the sharp rise in input costs and a temporary closure of its subsidiary in Ukraine.

The Swiss group posted a 7% year-on-year decline in operating results (EBIT) to CHF149 million (Ä150 million), on 21% higher sales of CHF1.1 billion.

In a 9 Feb statement, Datwyler said the increased revenues reflected its acquisitions of QSR in the US and Xinhui in China, as well as the implementation of price rises.

Last year’s earnings decline was linked to the delayed impact of price increases, restructuring measures and the temporary closure of its Ukrainian subsidiary.

German-based automotive sealing major Standard Profil, a new entrant to the Top 50 review of global rubber products manufacturers, reported a “brightening” outlook at the first-quarter stage of this year.

The three months to end-of-March saw an easing of headwinds, amid diminishing supply-chain issues and falling material prices, Eschborn/Frankfurt-headquartered Standard Profil reported.

Sales increased by 46.5% to Ä137.6 million, or Ä122.4 million pro forma (see ERJ online report), reaching a new record level for the fourth consecutive quarter, said CEO Dr Klaus Elmer in the company’s first quarter review.

The CEO went on to note ‘a continuing stabilisation’ in customers’ planned production schedules with production volumes outstripping those of previous years.

And, with new OEM programmes set to grow further in the second half, Standard Profil “remains optimistic” for 2023, especially given an order backlog of Ä3 billion.

In particular, Elmer forecast double-digit growth in pro forma sales to more than Ä480 million for 2023, while expecting some – but not all – costs to settle throughout the year.

“While price levels for direct and indirect materials are expected to stabilise, particularly as a result of lower energy and raw material costs, labour costs will continue to rise,” said the CEO.

On the other hand, Standard Profil also foresees significant gains from current production volumes announced by customers, efficiency measures and recent pricing agreements.

With a market-share of around 19%, Standard Profil says it is Europe’s third largest supplier of automotive sealing products, behind SaarGummi (31%) and Cooper Standard (market share 22%).

The German-based group claims a 6% share of the global market, putting it in fifth place behind Cooper Standard (20%), Henniges (15%), Toyoda Gosei (14%) and SaarGummi (10%).

End-use markets

In terms of product markets, the performance of the latex gloves sector again caught the eye – but for completely opposite reasons to last year, when for example Top Glove and Supermax reported year-on-year growth of 130% and 242% respectively.

Having marched to the top of the hill on the back of a Covid-driven surge in demand, virtually all latex gloves makers marched back down again in 2022, amid over-capacity and stubbornly high inventories worldwide.

Some signs of recovery have emerged, with Top Glove reporting narrowed losses in its fiscal third quarter to 31 May 2023, on improved average selling prices and operational ‘optimisations’. The latter included a “decommissioning of obsolete production lines and temporarily stopping production at 17 of its 49 factories.

According to Top Glove, the decommissioning steps have reduced its production capability by 5 billion pieces, bringing total group production capacity to 95 billion gloves per year.

“While we may be in a loss position, it is encouraging that the quantum of operational losses has reduced from the previous quarter,” MD Lim Cheong Guan said of the first quarter results.

Nevertheless, Top Glove said the business environment is expected to remain “challenging and competitive” throughout the second half of 2023.

In the same space, it is interesting to track the progress of Austrian group Semperit, which is exiting the medical gloves business to focus solely on its industrial products portfolio.

By mid-2023, Semperit expects to complete the first part of a divestment of its Sempermed gloves production unit to Singapore-based gloves producer Harps Global – a Ä115-million deal announced last December.

Within five years, the group’s production of surgical gloves in Wimpassing, Austria and other operations in Sopron, Hungary, are to be transferred to Harps.

Sempermed, which operates gloves production facilities in Wimpassing, Austria and Kamunting, Malaysia, reported 2021 sales of $686 million.

While forecasting 2023 earnings (EBITDA) to come in between Ä70-Ä90 million, against Ä100 million last year, Semperit said the overall economic slowdown would have “a noticeable impact” on the industrial sector in the second and third quarter.

The Vienna-based group’s industrial sector includes Semperflex hose production unit; Sempertrans conveyor belts; Semperform gasket and sheeting unit; and Semperseal seals manufacturing business.

“Customers’ inventory optimisation programmes are already leading to restrained ordering behaviour as expected,” Semperit reported 10 May, adding that lower sales volumes and increased pressure on margins are to be expected.