News from Notch Consulting, Inc.

April 9, 2009

Rhein Chemie Announces Results, Details Recent Expansions

Filed under: Rubber Chemicals — Notch @ 5:37 pm

Rhein Chemie announced that it has ended FY 2008 with worldwide sales of EUR 281 million, down 5% compared to EUR 295 million in FY 2007. “Rhein Chemie performed very well in the first three quarters of 2008. This was marred by a significant fall in sales in the fourth quarter due to the general economic crisis,” said Dr. Anno Borkowsky, CEO and President of Rhein Chemie in a press release issued March 31, 2009. The marked downturn in the automotive industry had a particularly heavy impact on the company’s business.

Despite the difficult economic conditions, Rhein Chemie is pursuing expansion plans. At the end of 2008, new production facilities were started up as planned at the company’s Mannheim headquarters and in Qingdao, China. The investment for both projects amount to around EUR 12 million.

Rhein Chemie has been manufacturing its Rhenogran product line at its new production facility in Mannheim since the end of last year. This line consists of polymer-bound rubber chemicals that are used in the manufacture of tires and seals, for example, and improve the processing and quality of the end product.

At the end of 2008, the newly established company Rhein Chemie LOA (Qingdao) Ltd. began production of customized products and additive formulations for industrial lubricants in the eastern Chinese port of Qingdao. The new production facility includes a technical laboratory, where the company can perform a full range of key tests for its Asian customers. The company has been producing additives and service products for the rubber processing industry in Asia at its Rhein Chemie (Qingdao) Ltd. joint venture for the past ten years.

Three States Consider Tire Age Bills

Filed under: Tires — Notch @ 4:53 pm

Tire Business (subscription required) reports that three states — Hawaii, California and New York — have become the latest states to consider bills that would regulate the age of tires sold within their borders. In late 2008, the New Jersey Division of Consumer Affairs issued a notice of pre-proposal, soliciting comments on the feasibility of requiring the state’s tire dealers to disclose the age of the tires they sell.

The Hawaii bill would make it illegal to sell a tire more than six years after its date of manufacture, while the New York bill would require the manufacture date of the tire to be clearly molded on both sides “in a non-coded fashion.” The California bill would require all tire dealers to provide written information on sale documents about the age of each tire sold to customers, in English, Spanish, Chinese, Vietnamese, Tagalog and Korean. Customers would have to initial the information to signify they had read and understood it, and dealers would have to keep the documents for at least three years after the sale.

Goodyear CEO Outlines Strategy, Challenges

Filed under: Tires — Notch @ 4:38 pm

In his address at the company’s 2009 Annual Shareholder Meeting, Goodyear Tire & Rubber Co. chairman Robert Keegan said he “remains confident in Goodyear’s ability to drive performance during challenging economic conditions and emerge in a position of competitive strength.”

Keegan identified three specific areas that the company will emphasize going forward:

Top line – encompassing new product leadership, building core brand strength and leveraging Goodyear’s industry-leading distribution network;

Lowering costs – aggressively aligning Goodyear’s cost structure with today’s lower industry volumes; and

Managing for cash – focusing on the strength of Goodyear’s balance sheet and generating funds to reinvest in the business.

Rubber and Plastics News reports (subscription required) that Keegan also outlined a restructuring program at the meeting that would reduce Goodyear’s workforce by an additional 5,000 employees, bringing its total layoffs to 9,000 workers since mid-2008. The cost reduction program also includes instituting a global freeze on salaries; lowering its manufacturing costs through shortened work weeks, fewer manufacturing personnel and reduced third-party sourcing; increasing its lean manufacturing and Six Sigma processes; eliminating non-essential spending; and continuing to close underperforming retail stores.

The press release is here.

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