HANOVER, Germany—The market for rubber and tire machinery is in a state of flux, driven partly by developments in China, where many locally-based equipment manufacturers have reported a steep drop in sales in 2015 compared to the previous year.
The trend included significant year-on-year sales declines at three of the largest Chinese manufacturers, Yiyang Rubber & Plastics (down 67 percent), Dalian R&P Machines (down 18 percent) and Saferun Machinery (down 14.4 percent). Based on figures from the China Rubber Manufacturers Association, these declines are largely linked to the U.S. imposition of tariffs on Chinese tire imports.
Even China's largest tire machinery maker and smart factory pioneer Mesnac reported a 15-percent sales-drop in its preliminary results for 2015. This was despite the company having a well-developed overseas sales strategy.
As little as a year ago, Mesnac was aiming to increase overseas business from around 40 percent to 50 percent of sales overall. This year, the company is likely to have at least got close to this goal – though not as it had intended.
The percentage of Mesnac's sales outside of China “is rising more quickly than we expected, but not the way we wanted.” Mesnac vice president Karol Vanko said at the recent Tire Technology Expo in Hanover.
“Sales in China are in a very bad situation,” continued Vanko. “It is not a secret that, generally, the tire market in China is [experiencing] decreases, very deep decreases, because of [the loss of sales in] the U.S., and because of [declines in] Russian and European markets.”
The Chinese proportion of business has dropped significantly for all equipment suppliers, including overseas players with customers in China, he also pointed out.
In response, Mesnac is now focusing more on developing new projects in overseas countries including the U.S., Brazil and Mexico. Another target is Iran, now that sanctions have been lifted.
“We have customers all over the world and this number is increasing,” said Vanko. “What is different is that we have more important strategic customers, from the top 10, let's say.
“This is not time to get bigger and bigger: it is time for providing some very precise machines and fulfiling the requirements of the top customers.”
The Mesnac boss went on to identify some helpful trends in the market, including a shift by tire makers from making their own tire-building equipment to purchasing it from outside manufacturers.
“This is a very interesting chance for machinery makers,” said Vanko. “We can provide the R&D, the production and the service. This is the way we would like to go.”
Another positive, he said, is the tire industry's current drive to use more silica in its rubber compounds: “This new trend in the construction of the tire helps us to be more active in the mixing area. Companies are starting to invest more in the mixing area and looking at modernisation.”
Vanko went on to emphasize that the smart factory project remained Mesnac's number 1 priority. The company, he said, is continuing to develop integrated automation technology for every stage of tire manufacture, from mixing and testing through to handling and storage.
The concept, he said, is now starting to interest “even the most conservative customers in the tire sector, who never talked about it before”. This is, in part, because the company now has projects that show the savings that can be made in terms of people, operating costs and footprint on the factory floor.
Efficiencies include optimising processes such as pre-processing polymers and transfer to the mixer, combining polymers according to viscosity and filling the mixer automatically without an operator, the Mesnac VP said.
Another Chinese machinery maker Tianjin Saixiang Technology Co. Ltd., meanwhile, pegged its 2015 annual sales at about $57 million, down by 51 percent from 2014. The company saw a nearly $14.8 million net loss last year compared to nearly $8 million in net profit in 2014, according to its statement in February.