Chronicling a year: The biggest stories of 2022

It seems like 2022 was the year that the tire and rubber industry stepped back out again.

While most everyone stayed put in 2020 and dipped their toes in the water in 2021, in-person events and the ability to do business in person once again became fashionable this past year.

That doesn't mean that Zoom and Teams calls still are not part of everyday life—if anything, they are as prevalent as ever—but it also is clear that our industry is one built on relationships, and meeting face-to-face remains a vital part of its fabric.

Against that positive backdrop, however, the tire and rubber sector has been directly impacted by Russia's unprovoked attack against Ukraine. Supply chain woes continue to impact many facets of the industry, though there does appear to be some light at the end of the tunnel as 2022 comes to a close.

The year brought back a sense of normalcy with acquisitions, expansions, trade battles and labor contracts. There also appears to be many holding onto a sense of optimism, despite fears of a looming recession.

These are just some of the issues that we covered this past year, as we present this "Six Pack" of our top stories of 2022, as chosen by the Rubber News staff.

In the last week of February, the world changed for the worse when Russia launched an unprovoked attack on Ukraine, a war that still rages as 2022 comes to an end.

While the leaders and people of Ukraine have fought bravely against their much-larger border foe, the tire and rubber industry has felt the trickle-down effect.

From dealing with the energy crisis caused by a lack of access to Russian natural gas to the need for nations within the European Union to find alternative sources of carbon black, suppliers and end-rubber goods makers have had to scramble to meet obligations.

A number of tire makers have had to deal with the fallout as well.

Nokian Tyres P.L.C. took an early and proactive stance, in spite of the fact that the firm had exported about 60 percent of the tires it made at its Russian plant, mainly for customers in Europe.

But in late October, Nokian said it was selling the factory to P.J.S.C. Tatneft in a deal valued around $400 million.

Bridgestone, which had suspended its Russian operations March 14 due to the war, also put its tire plant in Russia up for sale at the end of October.

Many in the industry also showed support for the people of Ukraine, particularly those firms with nearby operations, such as Orion Engineered Carbons and Polish-based synthetic rubber producer Synthos S.A.

Besides many in the firm helping house refugees from Ukraine, Synthos recommissioned a polybutadiene facility it purchased from Trinseo S.A. to help support the European market, said Matteo Marchisio, director of the Synthos SR business.

He added that Russia had supplied a substantial amount of polybutadiene to Europe, but the material is becoming less available "not because there are sanctions, ... but because the sentiment of European tire manufacturers for Russian imported raw materials has changed."

Within a week's time in August, two tire manufacturers announced expansion projects that call for nearly $2.2 billion in investments at factories in Tennessee.

Hankook Tire America Corp. said it will spend $1.6 billion at its plant in Clarksville. The project will double capacity for passenger and light truck tires and bring the South Korean parent Hankook Tire & Technology its first U.S. production of truck/bus radial tires.

"We've gotten to a point today that we basically need more product to satisfy the demand in the North American market, and our South Korea plant today is shipping everything it can, and we can sell it all," Rob Williams, senior vice president of North America sales for Hankook Tire America told Rubber News.

Hankook expects to break ground on the expansions in early 2023, with production to begin by late 2024 and reach full capacity in early 2026. It plans eventually to hire 1,200 additional employees.

Bridgestone Americas also made a big splash, saying it will invest $550 million to expand its truck and bus tire plant in Warren County, Tenn. The firm will add 850,000 square feet to the factory, bring on 300 new employees and boost daily capacity by more than 30 percent.

"It underscores both our confidence in the market and in our Warren teammates for their capacity to support the business in terms of growth, quality, efficiency and new technology," said Riccardo Cichi, Bridgestone Americas president and chief sales officer for North America.

Before Ellis Jones, Goodyear's chief sustainability officer, took the stage to give the keynote at the International Tire Exhibition & Conference in September, he had a question for the conference chair.

Jones wanted to know how many talks on sustainability there typically are at ITEC shows. The answer was few, unlike this year when the program was peppered with presentations on the topic.

And during the Tire Society meeting held the same week—dubbed Tire Week in Akron—Alexis Garcin, CEO of Michelin North America Inc, told that audience that a sustainable business must focus every decision and strategic move on finding the best balance for people, profit and planet. After all, the reasoning goes, a business can't be sustainable if it's not profitable.

Many stories during the year included sustainability as a theme, from alternative forms of natural rubber, to more sustainable processes for carbon black.

There are partnerships to deal with end-of-life tires, and efforts toward building a tire out of 100-percent sustainable materials continues.

While the term "sustainability" has been a buzz word for sometime, 2022 may be remembered as the year—though final goals remain a ways away—that the rubber industry finally began the march toward its destiny.

The interconnectivity of the world is no more apparent than in the supply chain woes that continued into 2022, though some in the industry say they are seeing a dim light at the end of the tunnel.

From a shortage of truck drivers to the microchip lag that once again cut into potential global vehicle production, the difficulties of 2021 roared again in 2022.

The headwinds affected nearly every industry this year, with tires and rubber no exception.

Perhaps the most glaring example of the impact of a suffering supply chain is that by early December, more than 4.35 million vehicles were eliminated from factory plans, with 1.65 million of those in North America, because of microchip shortages. That was after losing 10.6 million units in 2021.

Assuming the $2.3 billion deal for Sweden's Trelleborg A.B. to sell its Trelleborg Wheel Systems business to Japan's Yokohama Rubber Co. Ltd. goes through, it may be a deal that actually benefits all involved.

For Trelleborg, TWS is a business unit that has not performed at the financial level of the group.

It accounted for 30 percent of revenue in 2021, but just 22 percent of EBIT. The sale, company officials said, would put Trelleborg in a net cash position to allow for growth through increased capital expenditures and targeted purchases to bolster its remaining Trelleborg Sealing Solutions and Trelleborg Industrial Solutions businesses.

Yokohama saw something totally different. It saw TWS as a way of evening up the composition of Yokohama's tire business, which at present has consumer tires accounting for double the sales of its commercial tires.

It also sees TWS as an operation that more than tripled its EBIT in recent years, and gives it a broader manufacturing footprint and sales in areas where Yokohama's off-highway business previously was lagging.

It was early in the pandemic that the U.S. came to the stark realization that a lack of domestic production of a variety of personal protection equipment—or PPE as it came to be known—was a major weakness for the country.

Since then, there has been no shortage of announcements to build nitrile glove plants in the U.S., and that trend continued in 2022. Among the plans unveiled were:

• Recently formed American Nitrile L.L.C. entered into a financing agreement with Orion Infrastructure Capital, where Orion would provide $105 million in financing to help refurbish and equip a facility in Grove City, Ohio;
• Showa Group said it will triple its domestic PPE glove capacity and had plans to produce an additional 1.2 billion gloves by the end of 2022. The Menlo, Ga.-based company said it is in the process of a three-phased buildout of two additional facilities at its 40,000-sq.-ft. facility in Fayette, Ala., and it has received more than $81 million from the U.S. Department of Health & Human Services to drive this expansion;
• United Safety Technology Inc. unveiled plans for a $340 million nitrile glove manufacturing operation in Maryland that it said would produce 375 million nitrile gloves a month by early 2023; and
• Medical manufacturer Isikel L.L.C. said it will self-fund a $44 million project where, at a leased facility in Katy, Texas, the company will produce 440 million nitrile gloves per year, as well as 24 million saline bags and 72 million saline flushes.

And to be a "truly secure" domestic product, the materials need to be U.S.-sourced as well—something that remains critical to Showa's mission as the only pre-pandemic producer of nitrile gloves in the U.S.

The company secured supply of NBR with Zeon Chemicals, which plans to supply the elastomer from its Louisville, Ky., operation.

With demand for medical gloves expected to drop—some believe it already has—as coronavirus-related needs decline, it will be interesting to see which of the nitrile glove projects that have been announced in the past two years come to fruition.