HANOVER, Germany—Despite economic and geopolitical headwinds facing the tire and rubber industry, Continental A.G. managed to stay the course throughout 2022.
The company ranked No. 4 in the 2022 Global Tire Report with 2021 sales of over $12 billion. And as of the company's third-quarter financial report this year, Conti's tire segment had seen nine-month earnings grow nearly 5 percent compared to last year to over $10 billion.
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The company also nabbed the title as China's leading OE supplier for passenger car tires in the first half of 2022.
As for its non-tire segments, Continental maintained its No. 2 spot in Rubber News' annual ranking of the Top 50 Non-Tire Global Rubber Product Makers, based on 2021 sales of $6 billion from its ContiTech unit.
ContiTech's hose division also ranked No. 4 in Rubber News' inaugural hose ranking with an estimated $1 billion in 2021 sales.
While ContiTech's earnings so far in 2022 have come in below last year's earnings—down more than 27 percent according to the company's third-quarter financial report—the unit's sales increased by more than 10 percent to $5 billion.
The company linked the decline to a volatile market, including cost inflation.
But as the Hanover-based manufacturer so far has boasted an overall increase in sales and earnings, the company also has made gains with several expansions and acquisitions while making strides toward an innovative and more sustainable future.
Continental is growing to meet its customers' needs, both organically and through acquisitions.
Conti kicked off the year by investing more than $28 million to increase its footprint in South America to expand steel cord conveyor belt manufacturing operations in Brazil. The expansion is anticipated to be operational by 2024.
And in September, the company's ContiTech unit invested $40 million to build a new hydraulic hose plant in San Luis Potosi, Mexico, where the company will employ 150 with production also slated to begin in 2024.
But expansions aren't the only way the company is growing, as Continental increased its belting presence with four major acquisitions this year.
On July 5, ContiTech completed the acquisition of Wahpeton, N.D.-based WCCO Belting Inc., a 68-year-old company known for its safety and innovation in the agricultural, aggregate and construction belting space, thus increasing Conti's presence in the agriculture conveyance market.
Philip Nelles, member of Continental's Executive Board and head of the ContiTech Group Sector, called the strategic acquisition a "three-fold perfect fit" for the company, boosting its sales, portfolio and people.
But just one day prior to this, Continental had announced on July 4 that its conveyor solutions segment would acquire mining belt supplier NorrVulk A.B., located in Gallivare in northern Sweden, the first of three Swedish belting acquisitions.
On Sept. 8, Conti's conveyor solutions segment then acquired Karlstad, Sweden-based Vulk and Montage Group, a provider of add-on products for the conveying industry.
And on Dec. 1, Conti expanded its industrial belting service footprint with the acquisition of Backes Transportbandservice A.B., a service provider for the material handling industry located in Vaxjo, in southeast Sweden.
Song Qi, head of global business for the conveyor belt division at Continental, said each of the Sweden-based acquisitions "underscores our goal of further expanding our service business directly with our customers and aligning our focus accordingly."
Continental in 2022 continued to innovate, taking advantage of new technology for increased efficiency and safety, and making structural changes to meet an evolving automotive market.
In the spring, Conti continued its push toward cloud-based technology, launching its Conti Load Sense system, a program that the company said offers a more efficient, reliable and safe transport of materials by using 2D radar and ultrasonic technologies to measure material flow on conveyor belts.
And just two months later, Conti took another step toward achieving a "digital ecosystem" in May by expanding digitization in the hose sphere with a cloud-based addition to its Smart Test Bench technology, integrating CrimpCloud, CrimpIQ technology and the smart bench for hose building.
Andreas Gerstenberger, head of the Industrial Fluid Solutions segment, said the technology "increases efficiency, accuracy, safety and user friendliness" for customers.
That same month, the German manufacturer developed an autonomous vehicle for brake performance testing—housed at Conti's flagship R&D center near Hanover—allowing the tire maker to perform tests regardless of vehicle specific characteristics.
The AVA (analytic vehicle AIBA)—a driverless and fully electric test vehicle—combines a model-independent test method with the controlled and reproducible test environment of its automated indoor braking analyzer (AIBA), Conti had said in May.
But innovation doesn't just require new technology. Innovation sometimes needs some shuffling.
ContiTech in June launched the restructure of its hose sites in Germany—a move expected to save the company about $25 million by 2026, according to Katja Durrfeld, Conti's chief financial officer.
The restructuring involves the consolidation of Conti's mobile fluid systems operations in Waltershausen, Korbach and Oedelsheim, as well as its Oedelsheim/Hann. Muenden production network.
This will help the company align with the changing requirements of the automotive and commercial vehicle markets, according to Conti.
"We want to use our material and process expertise in such a way that the business area for automotive hoses and lines is ready to face future competition in the field of e-mobility for cars and trucks," ContiTech CEO Philip Nelles said in June.
Continental ended 2021 by doubling down on its commitment to a sustainable future, a commitment the company has carried into 2022 and beyond.
After the tire maker signed on with HeveaConnect last year for responsible and transparent sourcing of natural rubber, the company followed up on this with a partnership in March with Project TREE (Transparent Rubber Ecosystem for Earth), a pilot initiative by Itochu Corp. The pilot is intended to promote the sale of more sustainable tires made from more traceable and responsibly sourced NR.
And by late summer, the company boasted the production of its Gravity-brand mountain bike tires all being entirely produced with responsibly sourced NR.
The tire maker and Australian partner Security Matters Ltd. also have developed new technology—"chemical-based barcodes"—that can help track the origin of NR used in tires and other rubber products.
The tire maker also is one of several major players in pursuit of a 100-percent sustainable tire.
Having already incorporated silicate from rice husk ash and plant-based oils, as well as its "Cokoon" adhesive technology that replaces resorcinol and formaldehyde in bonding applications, the company made a leap in sourcing sustainable materials for the production of tires with its ContiRe.Tex technology in April by launching volume production of tires made from recycled polyethylene terephthalate.
The technology uses recycled polyester yarn obtained from post-consumer PET plastic bottles and "completely replaces the conventional polyester in a tire carcass," the company had said. Through this method, a set of standard tires, for example, could feature around 40 recycled PET bottles.
In November, Conti began using recycled rubber materials produced by Waterloo, Ontario-based Tyromer Inc. in the production of tires, the result of a multi-year collaboration between the two companies.
In the alternative rubber sphere, the tire maker has expanded its research in dandelion-based rubber through its Taraxagum Project, which aims to cultivate dandelion rubber, known as Taraxacum kok-saghyz, and commercially scale the NR for use in all kinds of tires.
In September, the company announced a new partnership with German-based breeder Kartoffelzucht Boehm GmbH & Co. to gain "even greater clout" in the breeding of dandelions.
But what happens to the tire at the end of its life is just as important as what goes into it at the start for Conti.
In March, the company partnered with German waste-tire pyrolysis startup Pyrum Innovations A.G. to expand its circularity efforts, where Continental's tire waste disposal subsidiary, Reifen-Entsorgungsgesellschaft (REG), supplies ELT made by the manufacturer to Pyrum for recycling.
And for the fourth year in a row, Continental achieved the highest grade from the Carbon Disclosure Project in reducing carbon emissions along its supply chain, securing its place in the top 8 percent of more than 13,000 companies considered.
Conti is targeting 2050 as the deadline for using 100-percent sustainably produced materials in its tires and achieving climate neutrality along its entire value chain.
"We are convinced that sustainable and responsible business increases our ability to innovate and shape the future—adding value to the company and society," Claus Petschick, head of sustainability for Continental Tires, told Rubber News earlier this year.
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