News from Notch Consulting, Inc.

August 20, 2020

Continental earns praise for EcoRubber garden hose

Filed under: General, Rubber — Notch @ 10:43 pm

Continental A.G. has earned high marks from leading polymer and rubber experts for its EcoRubber garden hose that uses sugar cane ethylene rather than petroleum-based, reducing greenhouse gas emissions by 85 percent.

“Continental is consistently evaluating renewable oils and reclaimed or recycled materials that will reduce our reliance on petroleum-based products while also reducing emissions and landfill of end-of-life rubber products. There were few EPDM rubber grades available with bio-renewable content, so we saw an opportunity….[I]t was our goal to increase the overall amount of renewable material in garden hose construction while maintaining hose performance.”

Andreas Gerstenberger, Executive Vice President at Continental and head of the Industrial Fluid Solutions business unit

August 14, 2020

Conti expects slight recovery for remainder of 2020

Filed under: Auto, Coronavirus/COVID-19, General, Tires — Notch @ 12:49 pm

Continental A.G.’s tire group expects a slight recovery in the tire market for the remainder of 2020, despite suffering a 23 percent drop in first-half sales revenue,

Rubber & Plastic News reports that Conti attributes decline in sales volumes for passenger and light truck tires to the negative impact the COVID-19 pandemic.

The German group said it expects demand for replacement tires for cars and light commercial vehicles to “normalize” in the third quarter, although that means volumes in Europe will be 10 percent to 15 percent lower than a year ago and 5 percent to 10 percent lower in North America.

Continental invests $4 million to expand Indiana site

Filed under: Auto, General, Rubber, Tires, Uncategorized — Notch @ 12:48 pm

Rubber & Plastic News reports that Continental A.G. is planning a $4 million expansion of their Auburn, Indiana facility, transforming the facility into a research, development and technology hub for its ContiTech Vibration Control business.

The $4 million investment will not only upgrade the facility, it will bring more than 45 new jobs to northeastern Indiana, according a joint news release issued by Continental and the Indiana Economic Development Corp. It also will allow ContiTech to consolidate its vibration control technical center operations, currently in Michigan and Canada.

The Indiana facility should be fully operational by 2024.

Despite drop in sales, Apollo sees strong recovery

Filed under: General, Rubber, Tires — Notch @ 12:45 pm

Apollo Tyres Ltd. suffered a 34 percent drop in sales in the quarter ended June 30, although the company reported a strong recovery throughout the month of June, according to Rubber & Plastic News.

“While the first half of the first quarter was almost a complete washout, our performance has been excellent since the markets opened up, especially in the replacement market,” Apollo Chairman Onkar Kanwar said.

Apollo also reports its European operations results were better than the industry average, despite COVID-related challenges.

U.S. auto sales outlook is still low, but shows improvement

Filed under: Auto, Coronavirus/COVID-19, General — Notch @ 12:45 pm

Rubber & Plastic News reports that the outlook for auto sales for the remainder of 2020 is better than it was a few months ago, though far from a banner year.

A recovery began almost as abruptly as things fell apart in the spring, according to analysts who gave an economic overview of light-vehicle production and sales in a Zoom presentation Aug. 5 during the Center for Automotive Research Management Briefing Seminars

But it will take that recovery a long time to get back to the 17 million-plus U.S. sales levels of previous years.

IHS Markit is calling for light vehicle sales of 13.3 million this year, compared with 17.1 million last year.

August 12, 2020

Earnings down double-digits for Toyo 1st half sales

Filed under: Auto, General, Tires — Notch @ 8:39 pm

On August 7,

Toyo Tire released financial results for the second quarter of fiscal year 2020, projecting double digit declines.  Toyo posted 48.3% lower operating income for the six months ended June 30 on 15.7% lower sales. The company’s operating ratio fell from 8.6% to 5.3% and operating income fell to $73.4 million on sales of $1.39 billion. Net earnings fell to $4.8 million, down from 93.1%. Negative effects of lower sales and higher production costs were cited for the decline. Toyo said that tire demand hit bottom in April, and the replacement market has begun to recover in some regions, including North America. As auto manufacturers have resumed production, the size of the demand decline for tires for new vehicles has been shrinking.

Festival of Automotive to be held virtually for 2020

Filed under: Auto, Conferences, General — Notch @ 7:56 pm

The Festival of Automotive conference will be held virtually next week from August 18-20. The meeting will encompass both the WardsAuto Interiors Conference and the WardsAuto UX Conference. Registration is now open for the 3-day event, which features informative sessions and insightful speakers.

Bridgestone expects 2020 sales to drop 23% year-on-year

Filed under: General, Tires — Notch @ 7:53 pm

On August 7, Bridgestone Corporation released financial results for the first half of 2020, attributing the negative effects of the COVID-19 pandemic for the 68.3% drop in operating income. Bridgestone forecasts the trend will continue for the full year, with sales falling about 23% shy of fiscal 2019 revenue.  Bridgestone reported a net loss of $203.7 billion, with an operating income of $477.2 million for the first half of the fiscal year on sales of $16.1 billion. Primary reasons for the lower earnings include reduced volumes and currency depreciation impacts. Gains from lower raw materials and operating expenses and improved price/mix effect helped offset the negative factors. Bridgestone noted a “particularly large depression in European and North American markets,” which prompted ongoing caution with regard to market conditions in those regions despite signs of recovery since the beginning of June 2020. The company said it expects moderate recovery in the near term but a “demand drop due to 2nd wave of COVID-19 forecasted over Q4,” with less impact of second wave expected compared to first wave.

 

May 7, 2020

Orion announces Q1 results, sales down 12.7% YOY

Filed under: Carbon Black, General — Notch @ 9:17 pm

On Thursday, Orion Engineered Carbons released their results for Q1 2020, reporting a 12.7% drop in sales and a 10.5% decline in volumes relative to Q1 2019. Declines were sharpest in Rubber Carbon Blacks, which showed a 14.6% decline in sales and an 11.1% decline in volumes. Specialty Carbon Black saw a decline of 9% in sales and 8.8% in volumes during the quarter. Specialty black demand was down mainly due to “weakening demand in the North America and Western Europe regions predominantly in the automotive and pipe markets.” Rubber black demand was down due to a “sharp decline in sales volumes beginning in mid-March as tire and auto manufacturing plants closed due to COVID-19.” Orion also attributed lower Rubber Black volumes to a “strategy as part of 2019 contract negotiations to emphasize raising price closer to reinvestment levels over volume.”

A few key takeaways from the earnings announcement:

  • OEC reported that all of its plants continued to operate during the quarter but the company implemented a flexible production schedule whereby reactors are run for a few weeks to restock inventories, then shut down.
  • OEC plants were at about mid-40s percent utilization in April.
  • More than 75 percent of tire plants served by OEC were fully or partially idled in April.
  • OEC expects tire manufacturing plant restarts to occur slowly.
  • In contrast to the tire market, only a few specialty customers were idled.

OEC will hold its earnings call on Friday, May 8 at 8:30 a.m. (EST).

May 5, 2020

Tire production resumes at Toyo plant in Georgia

Filed under: Coronavirus/COVID-19, General, Tires — Notch @ 11:05 pm

On May 3, Toyo Tire Holdings of Americas Inc. will reopen its White, Georgia tire plant, ramping up gradually on a revised shift schedule.  The plant has been idled since March 30 due to the COVID-19 pandemic.

Toyo is implementing additional health and safety measures based on CDC guidelines.

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