Pandemic casts pall on rubber industry in 2020

As rubber-related firms started releasing their financial results during the first half of 2021, it was clear that the global coronavirus pandemic would have a deep impact.

But with the rankings of the Top 50 North American rubber product makers and Top 50 Global Non-Tire rubber goods firms now complete, the numbers make it even more apparent just how deep the downward pressure on the industry was in 2020.

For example, of the 50 rubber firms represented in the annual Rubber & Plastics News rankings for North America, 42 of those showed sales declines for the year, with many high percentage drops. Many of the players moved up multiple positions even while seeing sales slump.

Of the eight that did see a bump in revenues for the year, four of those benefited from supplying rubber goods into health care fields that showed spikes in demand. Those included West Pharmaceutical Services Inc., Ansell Healthcare Inc., Semperit Group and Q Holding Co.

Semperit's Austrian parent, in fact, pulled back on selling its health care business because of the positive financial impact it had in 2020 and into 2021.

Of the other four with sales gains for 2020, AirBoss of America Corp. and Avon Rubber P.L.C. both gained a good share of defense-related contracts in 2020, while Parker-Hannifin Corp. benefited from having a full year of revenue from its purchase of Lord Corp. in 2019.

Sumitomo Rubber North America Inc. was the only tire manufacturer to see its sales grow in North America in 2020.

For the record, Bridgestone Americas Inc. again retained the No. 1 spot among the continent's rubber product makers, while Freudenberg Group slipped past Continental A.G. to become the top global producer of non-tire rubber goods.

In North America, Bridgestone kept the No. 1 position even though its rubber product sales in the region dropped an estimated 13.6 percent during 2020 to $9.25 billion.

Michelin remained No. 2 at $8.07 billion, down 19 percent from 2019. Goodyear again was No. 3, with estimated rubber product sales of $5.38 billion in North America, off 23 percent from 2019. It will benefit in next year's rankings, with nearly seven months of results from its purchase of Cooper Tire & Rubber Co., which ranked as the No. 6 rubber product producer in North America at an estimated $2.15 billion.

Continental Tire North America retained the No. 4 slot at $4.28 billion. Besides tires, it also derives a significant amount of revenue from its ContiTech business, a major producer of hose, belts and other non-tire rubber goods. And Parker-Hannifin, boosted by the revenue from Lord Corp. business, moved up one spot into No. 5, with an estimated $2.2 billion for 2020. Parker again was the top ranked North American rubber goods manufacturer that didn't derive all or the majority of its revenues from tires.

After Cooper at No. 6, the top 10 was rounded out by Toyo Tire (USA) Corp. at No. 7, with $1.74 billion in sales on the continent; Sumitomo, jumping up four spots to No. 8, with $1.46 billion; Yokohama Tire Corp., steady at No. 9 with $1.42 billion in North American sales; and Gates Industrial Corp. P.L.C., moving up a spot to join the top 10 at $1.35 billion.

To put the breadth of the decline in perspective, the top 10 firms in last year's ranking had cumulative sales of $43.8 billion in 2019. This year, the total for the top 10 slumped 14.8 percent to $27.3 billion in 2020 sales.

There were 14 members of the billionaire club in 2020, two fewer than those with sales exceeding $1 billion in North America for 2019. Those dropping below that prestigious mark were Pirelli Tire North America, which fell just $10 million short, and Trelleborg North America, which had a decline of more than $200 million during 2020.

Church & Dwight Inc. was one firm that saw its corporate sales climb during 2020, but its rubber product sales dipped a bit. The Princeton, N.J.-based firm markets a number of brands that are well-known in the U.S. Its "power brands" include such names as Arm & Hammer, Orajel, OxiClean and many others. These products included a handful that were among those in high demand during the early days of the pandemic, leading to sales gains.

Overall sales for Church & Dwight climbed 12 percent, but one of its other power brands—Trojan condoms—saw sales dip along with the rest of the condom industry. While Trojan remains the No. 1 U.S. brand, the company noted in its annual report that condom usage has declined for a number of reasons, such as a lower population of 18 to 24 year olds, alternate birth control options, less fear of HIV and decreased need due to the social distancing requirements put in place because of the COVID-19 pandemic.

Global Non-Tire ranking
Medical firms also made gains on the global stage, with a number seeing their non-tire rubber products revenues soar during 2020.

For example, West Pharmaceutical saw estimated rubber products sales jump 17.4 percent to $1.5 billion, allowing it to move up from No. 20 to No. 16 in the rankings.

Other medical firms with significant gains in 2020 were Malaysia's Top Glove Corp., which jumped 10 spots to No. 12 with 2020 sales of $1.7 billion, 47 percent higher than the prior year; Ansell, with global rubber goods sales up 7.6 percent to $1.53 billion; and Supermax Corp., which saw sales soar 35 percent to $501.4 million, good enough for No. 43.

Looking at the top half of the rankings, just eight of the top 25 saw sales growth in 2020.

Freudenberg took the No. 1 spot with an estimated $6.03 billion in rubber product sales, with Conti dropping to No. 2 at $5.57 billion.

The rest of the top five were the same, with Hutchinson S.A. third at $4.32 billion; Sumitomo Riko Co. Ltd. No. 4 at $3.54 billion; and Bridgestone No. 5 at $3.37 billion.

Rounding out the top 10 were Parker-Hannifin, the top ranked U.S.-based firm, at No. 6 with $3.29 billion; Japan's NOK, up two spots to No. 7, at $2.97 billion; Gates No. 8 at $2.79 billion; Trelleborg No. 9 at $2.61 billion; and condom maker Reckitt Benckiser Group P.L.C., marketer of the Durex brand, climbing one spot to join the top 10 at $2.33 billion.

As is true in most years, mergers and acquisitions made a difference this year and will do so in the years to come, both in the North American and Global Non-Tire rankings.

Besides the gains Parker made by purchasing Lord and Goodyear's just-completed purchase of Cooper Tire, other deals of note included:

• Bridgestone's $3.4 billion sale of its Firestone Building Products business, one of the top rubber roofing businesses;
• Cooper Standard Automotive Inc.'s divestment of its European rubber fluid transfer and specialty sealing business to Mutares S.E. & Co.;
• Italy's Manuli Rubber Industries, a newcomer to the Global Non-Tire Top 50 ranking, boosted by its purchase of Australia's Ryco Hydraulics, a deal that increased its 2020 revenues by $101.3 million; and
• Eaton's January 2020 agreement to sell its hydraulics business to Danfoss A/S for $3.3 billion, a transaction that has yet to close.