News from Notch Consulting, Inc.

June 9, 2015

Goodyear and Sumitomo agree to terms dissolving 16-year alliance

Filed under: Tires — Notch @ 6:15 am

Last week, The Goodyear Tire & Rubber Co. announced that it has reached agreement with Sumitomo Rubber Industries, Ltd. (SRI) to dissolve the global alliance between the two companies. Goodyear and SRI formed the global alliance in 1999. It primarily consists of four joint venture operating companies, one each in North America and Europe, and two in Japan. The agreement announced today, when closed, would resolve the pending arbitration filed in January 2014. Details of the dissolution are below.

Overview of Agreement

North American Joint Venture

  • SRI (currently 25 percent interest) will acquire Goodyear’s 75 percent interest in Goodyear Dunlop Tires North America, Ltd. (GDTNA), which primarily manufactures and sells Dunlop-brand tires in North America, including full ownership of the joint venture’s tire plant in Tonawanda, N.Y.
  • Goodyear will retain exclusive rights to sell Dunlop-brand tires in both the consumer and commercial replacement markets of the United States, Canada and Mexico as well as to non-Japanese vehicle manufacturers in those countries.
  • In addition to assuming full ownership of the Dunlop motorcycle tire business in North America, SRI will have rights to sell Dunlop-brand tires to Japanese vehicle manufacturers in the United States, Canada and Mexico.

European Joint Venture

  • Goodyear (currently 75 percent interest) will acquire SRI’s 25 percent interest in Goodyear Dunlop Tires Europe B.V. (GDTE).
  • Goodyear will retain exclusive rights to sell Dunlop-brand tires in both replacement and original equipment consumer, commercial, motorcycle and racing markets in European countries where the current joint venture exclusively serves the market.
  • SRI will obtain exclusive rights to sell Dunlop-brand tires in certain countries that were previously non-exclusive under the global alliance, including Russia, Turkey and certain countries in Africa.

Japanese Joint Ventures

  • Goodyear (currently 25 percent interest) will acquire SRI’s 75 percent interest in Nippon Goodyear Ltd., which serves the replacement market in Japan with Goodyear-brand tires.
  • SRI (currently 75 percent interest) will acquire Goodyear’s 25 percent interest in Dunlop Goodyear Tires Ltd., which serves the original equipment market in Japan with Goodyear- and Dunlop-brand tires.
  • Goodyear will regain exclusive rights to serve the Japanese replacement and original equipment markets with Goodyear-brand tires.
  • SRI will continue to have exclusive rights to sell Dunlop-brand tires in the Japanese replacement and original equipment markets.

Financial Terms of Agreement

Under the terms of the agreement, Goodyear will pay SRI $271 million upon closing of the transaction, which is expected in the fourth quarter of 2015. The transaction does not impact the company’s existing 2015 and 2016 financial targets or capital allocation plan. The outlay is included in the approximately $600 million designated for restructurings under the capital allocation plan. In addition, Goodyear will repay a pre-existing debt of approximately $55 million to SRI within three years from the date of closing. As a result of the agreement, Goodyear will also sell its 3.4 million shares of SRI common stock.

Goodyear expects the transaction to be accretive to its earnings beginning in the first quarter of 2016, related mainly to the elimination of minority interest in GDTE. Based on the company’s 2015 operating plan, the annual benefit to adjusted net income would be approximately $40 million to $50 million (15-18 cents per share).

The transaction is subject to customary closing conditions, including the receipt of regulatory approvals as well as SRI’s completion of a labor agreement with the United Steelworkers union for the Tonawanda plant.

Conti expanding Hefei, China tire plant

Filed under: Tires — Notch @ 6:00 am

Continental AG announced last week that it is expanding its tire plant in Hefei, China. The project will see the gradual ramp-up of the current production capacity of five million car tires per year to 14 million units by 2019. Capacity for bicycle tires will increase from 2 million units/year at present to 13 million units/year by 2025. To date, Continental has already invested €250 million in the Hefei plant and by the time the agreed investment plans have been realized the total will have surpassed €500 million.

June 8, 2015

Pyrolyx AG completes merger with cct Stegelitz GmbH

Filed under: Tire Recycling — Notch @ 11:36 pm

On June 3, Munich-based Pyrolyx AG announced it had completed its merger with cct Stegelitz GmbH. cct will be integrated into the Pyrolyx Group, which will make the merged company the world’s largest producer of rCB (recovered carbon black). Pyrolux is expanding the production capacity of cct’s plant in Saxony-Anhalt, Germany.

Press release below:


June 4, 2015

Sid Richardson announces new carbon black plant in Mexico

Filed under: Carbon Black — Tags: — Notch @ 3:18 pm

Today, Sid Richardson Carbon and Energy Co. (Fort Worth, Texas) announced plans to build a new carbon black plant in Mexico, with startup scheduled for 2017. The exact location is yet to be decided, as are the capacity and grade mix. Sid Richardson is the largest carbon black producer in the United States, with three plants and 445,000 tons/year of capacity. This will be Sid’s first carbon black plant outside the US.

Below is the full text of the press release.


June 4, 2015 – Fort Worth, TX – Sid Richardson Carbon and Energy (SRCE) has begun the planning phase for the construction of a carbon black production facility in Mexico. “Based on the current demand for carbon black in North America and projections for the next 5 years alone, we are viewing this venture as a necessary move to serve our customers,” says Bill Jones, company President and CEO. “We hope to have this new facility producing carbon black in 2017,” Jones adds.

Additional information about this new facility is forthcoming on the company website at Questions can be directed to

Sid Richardson Carbon & Energy is a carbon black manufacturer, headquartered in Fort Worth, Texas. The company produces carbon black that is used in the production of tires, automotive parts, rubber roofing membrane, ink, coatings, and other manufactured products.

June 2, 2015

Tyrepress updates ranking of top tiremakers

Filed under: Uncategorized — Notch @ 11:40 pm

Tyrepress has published its updated list of the world’s largest global tiremakers. The ranking of the top nine producers remained unchanged from 2013 to 2014: Bridgestone, Michelin, Goodyear, Continental, Pirelli, Hankook, Sumitomo, Yokohama, and Maxxis. Cooper moved into tenth place in 2014, up from 13th place in 2013, while Giti dropped from 10th place in 2013 to 11th in 2014.

June 1, 2015

Evonik announces new silica plant in the US

Filed under: Silica — Notch @ 6:00 am

On May 26, Evonik Industries announced plans to build a new production plant for precipitated silica in the United States. Evonik did not release all details of the new plant as the project is still subject to approval from the relevant bodies, but the world-scale facility will be built in the South East of the United States, in close proximity to major American tire production sites. The investment volume for the facility will be in the upper double-digit million € range. Completion is scheduled for late 2017 to provide the North American market with products from local production. Evonik already operates a precipitated silica plant in Chester, Pennsylvania, which was expanded by 20,000 tons in a project completed in September 2014. Between 2010 and 2014, Evonik increased its global capacity for precipitated silica by around 30 percent.

In the press release, Klaus Engel, Chairman of the Executive Board of Evonik Industries, said, “Evonik is on a growth path. In planning this new silica plant, we are preparing our largest North American investment of the past five years. By doing so, we will continue to strengthen our leading market position as a silica supplier.”

Apart from precipitated silica, Evonik also produces AEROSIL® fumed silica and matting agents based on silica under the ACEMATT® brand name. Overall, the company has a global annual capacity for precipitated and fumed silica as well as matting agents of around 550,000 metric tons.

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