Rubber & tire industry in numbers

PROJECTS

Algerian tire maker El Hadj Larbi Industry has progressed its joint tire project with Doublestar: awarding of a construction contract for a rubber mixing workshop. The €300m tire plant is being constructed in Tafraoui, Oran province. It will have an estimated capacity to produce 7m tires/yr: 5m car tires and 2m truck & bus tires. Doublestar will contribute €5m to the project, due for completion by the end of 2026.

Trelleborg Sealing Solutions has completed an expansion of its production facility in Malta. The €14m investment adds 4,000m2 of manufacturing space, cleanrooms & equipment to support the production of medical and semiconductor sealing solutions. The workforce is expected to increase 20% to 600 to meet “new business demands.”ZC Rubber has revised its use of IPO proceeds after raising less than expected from its recent listing in Shanghai: raising Yuan4.06bn (€488m), below the initial target of Yuan4.85bn. In response, a planned investment in a 2.5m truck tire project in Qingquan has been cut from Yuan850m to Yuan325m, while an "expansion and storage" project at its Chunqiu plant in Jiande has been reduced from Yuan600m to Yuan180m. The funding gap will be covered using internal resources. Other allocations remain unchanged

M&A & RESTRUCTURING

Continental AG has confirmed plans to divest ContiTech next year and become a “pure-play” tire manufacturer. This will follow its planned divestment of ContiTech’s automotive unit (OESL) later this year. Under the new structure, Continental expects consolidated sales in the range of €19.5-22.0bn and an adjusted EBIT margin of 12.0% to 14.5% over the next three to five years.

Zeon Corp. plans to exit “low-profitability” products and shift focus to non-rubber investments, as it targets a 63% increase in earnings (EBITDA) to Yen 80bn (€475m) by fiscal year 2028, up from Yen 48.8bn in FY’24 and sales by 7% to Yen 450bn by 2028. By 2026, Zeon plans to discontinue the production of ESBR-1 and nitrile latex and later phase out production of butadiene rubber at Tokuyama. The cuts will represent 60% of elastomer capacity at the site. Zeon will continue producing “high profitability” elastomers: ESBR-2, nitrile rubber and solution styrene butadiene rubber.

MARKETS & BUSINESS

The UK ministry of defence has awarded Avon Technologies a £10.2m (€12m) contract for FM50 respirators to support the Armed Forces of Ukraine. The FM50 mask meets NATO military specifications and provides "full-face protection" against CBRN (chemical, biological, radiological and nuclear) threats, with "very low" breathing resistance to ensure wearer comfort. The UK manufacturer expects to start the delivery of the masks in the company's financial year 2026, starting 1 Oct.

ZC Rubber reported revenue of Yuan35.1bn in 2023 and Yuan18.4bn for the first half of 2024. Net profit stood at Yuan2.6bn in 2023 and Yuan2.54bn for first six months of 2024

For 2025, Continental projected that sales at its Tires group sector will remain unchanged at €13.5-14.5bn. Adjusted EBIT margin is expected to come in at 12.5% to 14.0%, down from the earlier estimate of 13.3% to 14.3%. Despite volatile markets, Continental said its tire business has shown “stable development in recent years.” For ContiTech, the group now expects sales of around €6.0-6.5bn, previously at €6.3-6.8bn, and an adjusted EBIT margin of around 6.0% to 7.0%.

SHARE PRICES

Leading tire manufacturers’ share-price trends

Leading rubber product manufacturers’ share-price trends

MATERIALS

Natural rubber 

Tokyo – Natural rubber pricing gained slightly during the week to 20 June, on concerns over supply, reported Japan Exchange Group (JPX). Rubber futures ended the week “slightly firmer” across all major exchanges, trading within a tight range throughout the week. Heavy rain and flooding in parts of southern China, Vietnam, and Thailand prompted some short-covering activity. Meanwhile, added JPX, geopolitical tensions in the Middle East, subdued tire demand from consumers, and uncertainty surrounding the Chinese economy due to US trade tensions weighed on market sentiment.

JPX: Selected rubber futures price trends on major trading exchanges

(ERJ calculation for selected futures) 

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