News from Notch Consulting, Inc.

January 30, 2019

Michelin to buy Indonesian tiremaker

Filed under: Tires — Notch @ 2:04 pm

Michelin is acquiring tiremaker Multistrada Arah Sarana to boost production in Indonesia. Founded in 1988, Multistrada had an annual production capacity of more than 180,000 tons in 2017 and generated sales of $281 million.

Michelin will pay $439 million for 80 percent of the Multistrada shares, subject to certain closing adjustments. Michelin will then launch a public offer for the remaining outstanding shares.

Michelin expects to reap synergies of $70 million annually within three years of completing the purchase, in production, sales, and purchasing. To strengthen sales operations, the French company will also obtain a 20 percent stake in Indonesian tire retailer Penta Artha Impressi.

Michelin CEO Jean-Dominique Senard said in a statement Tuesday: “The acquisition of Multistrada represents an excellent opportunity for Michelin to expand its operations in Indonesia, the most populous country in Southeast Asia, and immediately gain competitive, good-quality production capacity without having to create any new manufacturing facilities.”

Pieter Tanuri, Chief Executive Officer of Multistrada, said: “We are very proud of what we achieved with Multistrada and we are confident Michelin is the ideal partner to take Multistrada forward into a new era of growth and success for the benefit of all stakeholders and employees.”

Read the full press release here.

Giti to relocate Hefei tire plant by 2021

Filed under: Tires — Notch @ 1:23 pm

Giti Tire Group is planning to relocate its passenger and truck tire plant in Hefei, China in alignment with a “greener Yangtze River economic belt” initiative. The greener Yangtze River economic belt initiative was launched by China’s central government in 2016. Giti is pushing forward the relocation plan to improve its environmental impact.

Giti has spent more than $3 million since 2017 to address the odor emission problem at the plant. The company also has been running at low utilization rates of 40 percent for truck and bus tires and 20 percent for passenger car tires.

The Hefei plant, opened by Singapore-headquartered Giti in 1993, produces car, light truck, and medium truck tires. Capacity is listed as 23 million units annually.

The new plant’s location will be determined by year-end 2019, with regulatory approvals and construction plans in place by 2020. The company will break ground on the new plant in 2021 and start facility relocation by 2023.

Giti Tire Group has five other plants in China as well as a joint-venture plant in Indonesia and one in the U.S.

Referenced article found here.

RISE: Tire-derived oil can be used as fuel

Filed under: Tire Recycling — Notch @ 12:59 pm

According to a recent report by the EU Research, Innovation, and Science Policy Experts Group(RISE), along with Enviro and Ragn-Sells, pyrolysis oil derived from end-of-life tires can be used as fuel.

The research project, that kicked off in October 2017, set out to evaluate three different approaches for upgrading pyrolysis oil to higher grade products, with a special focus on co-upgrading to fuels together with fossil raw materials in refinery processes.

“We’re currently at a stage where we’ve demonstrated that fuel can be produced from tires and that pyrolysis oil is a feasible way for the petrochemical industries to reduce their consumption of fossil oil,” says Linda Sandström, project manager at RISE.

“For the project, we characterized and upgraded pyrolysis oil through various refinery technologies. At RISE Energy Technology Centre’s laboratory in Piteå, we conducted pilot-scale experiments where we compared upgrading pure fossil oil to oil with 20 per cent pyrolysis oil. The findings showed that that there were no significant differences between the two, and that pyrolysis oil is excellently suited to fuels.”

“We’re looking for a refinery that’s willing to accept pyrolysis oil as a raw material for production and thereby start reducing its consumption of fossil oil. Once we’ve shown that the concept can be commercialized and that it’s profitable, the general hope is for the industry to be willing to participate and develop it further,” says Sandström.

For Enviro, the goal of its development efforts with RISE and Ragn-Sells is for pyrolysis oil to be priced on the basis of its value to the petrochemical industry as a fuel as well as from the perspective of sustainability.

“We’re extracting about 500 kilos pyrolysis oil from 1 ton of tires by means of Enviro’s patented technology. With a plant that processes 30,000 tons of tires annually, that’s approx. 14,000 tons of oil per year available for the market. In other words, the financial potential is substantial. We’re looking forward to continuing the project and to explore the environmental and commercial benefits further,” says Thomas Sörensson, CEO of Enviro.

Read the full press release here.

Strong fourth quarter demand helps lift 2018 European tire sales

Filed under: Tires — Notch @ 12:28 pm

According to the latest European Tire & Rubber Manufacturers’ Association figures, the strong fourth quarter demand for replacement tires throughout Europe helped boost overall 2018 car and truck tire shipments over 2017 levels. Fourth quarter shipments of replacement consumer tires rose 2.8 percent to 48.5 million units, boosting annual shipments of car and van tires 1.2 percent to 207.5 million units. Fourth quarter replacement truck/bus tires demand jumped 16 percent to 2.78 million units, helping push annual shipments up 8.8 percent to 10.6 million units. Shipments of OE truck/bus tires rose 4.3 percent to 6.35 million units.

However, shipments of OE consumer tires and replacement agricultural and two-wheeler tires fell short of 2017 shipment levels. Shipments of OE consumer tires fell 3.6 percent to 83.7 million units. Shipments of replacement agricultural tires fell 3.5 percent for the year at 1.24 million units, despite a 10-percent shipment gain in the fourth quarter. Shipments of replacement motorcycle/scooter tires fell 1.8 percent for the year to 8.97 million units, again despite a fourth gain of 8.4 percent.

“All in all, the 2018 figures confirm a stable market evolving according to expected trends, welcoming the continued increase in winter and all-season tires adding to the safety on our roads,” ETRMA Secretary General Fazilet Cinaralp said.

The ETRMA’s data cover 29 European countries, stretching from Ireland in the west to Poland, Bulgaria, Romania and the Baltic states in the east.

Referenced article found here.

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