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July 25, 1994 02:00 AM

MULTINATIONAL RUBBER GROUPS INVADE SPAIN

Bruce Davis
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    Expansion into Spain by multinational rubber groups has been a notable feature of the last 10 to 15 years-to the point where most of the Spanish rubber manufacturing industry is now in the hands of non-Spanish companies. Spain has more than 30 significant multinational groups in the rubber industry, according to Jorge Cajal, director of the Spanish rubber manufacturers association, Madrid-based Consorcio Nacional de Industriales del Caucho.

    Some have been in the Spanish market for a long time, coming in as Spain geared up for entry into the European Union in 1986, Cajal added.

    Not all the multinationals, however, are in Spain to stay. Cajal said at least four or five of the large groups have closed production units in the last three years, although the firms are still active commercially.

    Despite the influx of multinationals, Consorcio's data show a gradual decline in total rubber goods production, particularly in non-tire products.

    Spain currently ranks fifth in Europe, making 12 percent of the EU's rubber goods. Tire and non-tire production totaled 467,686 metric tons in 1993, a drop of 6 percent from 1992.

    Tires are a very important part of the Spanish rubber sector, representing 66 percent of production by volume, Cajal said. All three Spanish tire manufacturers-Groupe Michelin, Pirelli S.p.A. and Bridgestone Corp.-are Consorcio members. The Consorcio estimates that Spanish rubber manufacturing is 75 to 80 percent devoted to auto supply (including the tire sector).

    In general, Spain is very satisfied with the benefits of EU membership, which has allowed increased sales of Spanish products outside the country. It also has enabled the introduction to Spain of goods where local products previously were protected by import tariffs and trade barriers, Cajal said.

    But, ``liberalization is advantageous in our sector,'' Cajal said, although ``imports have been growing spectacularly in the last few years.''

    The peseta devaluation of 20 percent in 1993 also made exports more competitive. This effect was counterbalanced only to a minor extent by higher raw material prices, despite the fact that imports account for practically 90 percent of the materials used, Cajal said.

    Repsol Quimica S.A., the sole local rubber producer, sells only a small part of its synthetic rubber locally, mostly to shoe manufacturers. But there are three Spanish carbon black plants, so the country is not dependent on imports.

    Unemployment in Spain hovers near the 23-percent level, but still the ``trend in all companies in the last four to five years, and in the future, is to reduce the ratio of indirect to direct personnel,'' Cajal said.

    In the rubber industry the labor force fell to 28,000 in 1993 from 30,000 in 1992. The industry has lost 5,000 jobs in the last five years. Productivity is improving, with production value per person in 1993 at $91,500, as opposed to $81,200 in 1992.

    Indigenous rubber product making remains important-some 20 to 30 companies in this category are of significant size, operating with Spanish capital, and good local technological research and marketing skills, Cajal added. There also are a number of smaller firms with complementary activities.

    The industry in Spain is concentrated in only a few of its 17 autonomous regions. Of the 220 members of the Consorcio, representing 85 to 90 percent of the sector, 80 (about 40 percent) are in Catalonia (the region which contains Barcelona).

    Madrid has nearly 40 (about 17 percent), the Valencia region in the south almost 30 and the Aragon Rioja Navarra and Basque regions in the north have about 25 each.

    In 1993, production of tires dropped by more than 5 percent in volume, to 318,632 tons, following an increase in 1992 of 5.1 percent in tons and 8.1 percent in units. Tire imports last year rose 10 percent from 1992, while tire exports advanced nearly the same amount.

    The non-tire sector had a poor year in 1993, with production falling 8 percent by volume and 4.3 percent in value.

    Imports fell by 3 percent and exports rose nearly 8 percent from 1992.

    About 83 percent of Spain's rubber exports go to EU countries, which also account for about 73 percent of imports. Other export markets include Africa (mainly profiles and miscellaneous products), South America (mostly hose and belting) and North America (largely profiles and hose), all with 3- to 4-percent shares.

    The bulk of the non-EU imports are from Asia and consist of elastic thread and tape, gloves, clothing and miscellaneous products.

    SR imports included SBR (68,400 tons), butadiene (22,800 tons) and EPDM for non-tire uses (13,600 tons).

    The presence of major automotive manufacturers was ``very important,'' in the decision of multinational rubber groups to set up in Spain, said Cajal, stressing that Spain is the only country in the world where all the major auto makers are present.

    Of the 242,200 tons of dry rubber used in Spain in 1993, 41 percent (94,700 tons) was Nnatural rubber, mostly from Indonesia (28,700 tons), Malaysia (22,500 tons) and Thailand (22,500 tons).

    SR imports rose more than 17 percent in 1992, to 128,400 tons. France is the principal SR supplier-47,500 tons in 1992-followed by Italy (16,300 tons) and the U.K. (13,250 tons).

    Another factor was the help given by some of Spain's 17 autonomous regional governments to ``investors coming into Spain in the industrial sector,'' Cajal added.

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