ERJ Business Briefing - March/April

Tracking the latest announcements and new business developments in the global rubber and tire industries:

Chinese automotive rubber & plastics components maker Rubber Leaf has completed an initial public offering (IPO) on the Nasdaq Stock Exchange. With the IPO, the Ningbo-based company aimed to raise $8 million (€7.5 million), through the offering of 1.6 million shares, priced between $4 to $6. Rubber Leaf mainly manufactures automotive sealing strips and supplies to major OEMs such as VW, according to its Nasdaq filing.

Preparations are underway for the next commissioning run of Pyrum Innovations’ second reactor at its main plant in Dillingen/Saar, Germany. The waste tire pyrolysis company aims to generate its own electricity from the thermolysis gas. Reactor 2, part of an ongoing expansion at the Dillingen site, has now been ramped up to more than 80% of its rated output and is currently on a maintenance shutdown, said Pyrum 22 April. The reactor is scheduled to be commissioned “within the next two weeks”. Furthermore, the company is preparing its third and final reactor for its first commissioning run. The start is scheduled for the week of 29 April to 2 May.

Injection moulding machinery supplier Engel has allocated “a substantial double-digit million euro” investment for the expansion of its global network in the new fiscal year, started 1 April. The investment will see Engel further reinforcing its ‘in the region for the region’ presence, in Europe, Americas and Asia, where it has independent hub structures such as sales, order processing, production and after-sales service. Read more

Finnish manufacturer Reka Rubber has posted sales for the first three months of the year down 16% year-on-year to €7.4m, while earnings declined 75% to €200k. Profitability was affected by decreasing volumes and the delay in passing through higher costs to pricing for customer.  Read more

Cabot Corp. and partners have been granted $5m in funding by the US department of energy to advance the deployment of hydrogen fuel cells. The project will focus on developing processes to manufacture specialised carbon black for use as a catalyst support for fuel cells. The project also involves catalysts maker Johnson Matthey; fuel cell stack manufacturer Bosch, and the University of California.  Read more

Trelleborg Group is expanding its pipe repair capabilities with the planned acquisition of Rajamaki, Finland-based BP-Tech Group. The acquisition is being made through Trelleborg Industrial Solutions, said the Swedish group 16 April. The Finnish business reported sales of just over SEK220 million (€19 million) across 24 countries in 2023.  Read more

Russia's Sibur has realigned its business management model in order to “further develop industries that consume polypropylene, polyethylene and synthetic rubbers.” The restructuring, effective as of April, focuses on “product divisions” and replaces basic polymers, plastics and organic synthesis, and synthetic rubbers divisions with new divisions. These will include agribusiness; recycling; flexible packaging; rigid packaging; engineering and transport infrastructure; healthcare; oil and gas processing and production; consumer goods; construction; transport and ‘e-commerce and partnerships’.

Yokohama TWS is raising the prices of its tires by up to 5% across all segments, the Japanese group announced 12 April. The price adjustment will come into effect from May and will cover Mitas and Trelleborg branded tires, the statement added. Yokohama TWS linked the decision to "rising costs of raw materials, as well as increased inbound logistics expenses.”  Read more

With a 1.1% year-on-year decline in production in January the EU27 chemical industry reported the second-lowest drop among the manufacturing sectors,  European Chemical Industry Council (Cefic) reported 5 April. January chemicals production level remained on a par with December 2023, Cefic in its March edition of chemical trends monthly.  Read more

Technip Energies and US technology company LanzaTech Global have been selected for a potential $200m funding award by the US government to produce ‘sustainable ethylene’ from captured CO2. The project aims to develop the technology in the US for integration directly into existing commercial ethylene crackers, whereby it will capture CO2 emissions from the process and convert them into sustainable ethylene.

James Walker has been granted continued ‘fit for nuclear’ (F4N) status. F4N is a service that allows companies to measure operations against the standards required to supply the nuclear industry – in new build, operations and decommissioning. James Walker materials and fluid sealing products are used across a broad range of applications, including: fuel processing and handling; power generation; waste processing and fuel/waste transportation and storage.

Belgian distributor Azelis has expanded its footprint in Germany with an agreement to buy the distribution business of DBH Osthandelsgesellschaft mbH (DBH). The DBH operation specialises in the distribution of advanced materials & additives (AM&A) in Germany and central & eastern Europe (CEE), announced Azelis. The transaction is expected to close during the second quarter of 2024, according to the Belgian group's 10 April release.  Read more

HSBC Global Research in March rated Covestro shares as ‘hold’ following a strong Q4 performance – Q4 EBITDA of €132m compared to a prior-year loss of €38m – and FY24 guidance for a gradual recovery. The polymers maker’s earnings, it said, will be restrained by “the new normal: general overcapacity in the global chemical supply-chain - with China adding supply and exporting - and a deflationary pricing climate.”  Covestro is, meanwhile, looking to reduce costs and support ‘valuation discussions’ with ADNOC, said the HSBC note, headlined ‘Waiting game continues.’

Toyo Ink India Pvt. Ltd said 9 April that it plans to expand its production capacity for solvent-based adhesives at its site in Gujarat, India. A new production facility will be built as part of expansion to meet rising local demand. The plant is slated to begin operations in April 2026 and will help to boost the site’s adhesive capacity by 3.5 times its current output. Industrial adhesive demand in India is projected to rise due to growing automotive sales and rapid growth of the country’s consumer electronics market.

Chinese machinery maker Mesnac has posted a 65% increase in annual ‘net profit’ to Yuan333bn (€42bn) in 2023, up from Yuan202bn reported the year before. Sales for the year fell slightly to Yuan5,650bn, down 1.5% from 2022, Mesnac reported 3 April. In its annual report filed at Shenzhen Stock Exchange, the group added that order volume was “running at a high level and the delivery guarantee capability has been further improved.”  Read more

Power transmission and fluid power solutions supplier Gates Corp. achieved a 9% increase in adjusted earnings (EBITDA) to $747m (€688 m for 2023, on slightly higher sales of $3.5bn. The higher earnings were linked to “commercial execution and supply chain efficiencies”, partially offset by lower volumes and higher labour and benefit costs. Sales improved on pricing but was partially impacted by lower volumes.

Parker Hannifin Corp. has recorded sales up 3% year-on-year to $4.8bn (€4.4bn) for the three months ended 31 Dec 2023. Adjusted earnings (EBITDA) margin rose 330 basis points to 25.7%, helped by strong aerospace and defence results, including synergies from the Meggitt acquisition. Overall, orders increased 2% during the quarter, reflecting a 4% decrease in diversified industrial business North America; 5% decrease in the diversified industrial business international and a 21% increase in the aerospace systems segment.

Manufacturer of rubber and silicone compounds Gummiwerk Kraiburg GmbH & Co. KG has announced a partnership with “emerging” Turkish rubber compounder Herpol Elastomer Sanayi AŞ. The agreement is based on “an exclusive licensing agreement and highlights Herpol as Gummiwerk Kraiburg’s preferred partner in Turkey.”

Chemicals and ingredients distributor Brenntag on 3 April announced the acquisition of Lawrence Industries Ltd, an independent specialties distributor in the UK. The deal, it said, “strengthens the company’s position within material science and across the coatings, adhesives, sealants and elastomers (case), construction, polymer and rubber industries.  Read more

Chinese tire maker Prinx Chengshan posted “the best results in its development history”: earnings (EBITDA) up 102.4% year-on-year to RMB 1,710m on 2023 operating revenue of RMB 9,950m, 22% above the prior-year level. Sales volume of semi-steel radial tires increased by 42.7% and by 20.5% for all steel radial tires “under fierce market competition, further increasing the market share,” it stated 28 March. 

Silicone supplier Momentive Performance Materials group "is expected to be fully acquired" by KCC Corp. its majority shareholder resulting in the exit of minority shareholder SJL Partners LLC, Momentive said 28 March. “Momentive has a 75-year track record of developing and manufacturing silicones and specialty solutions,” said Mong Jin Chung, chairman of KCC Group and Momentive. “We deeply believe in the company’s growth opportunity...”  Read more

In its annual report filed 28 March, Synthomer PLC reported a 15.5% year-on-year dip in revenue (in constant currency) for the continuing group to GBP1,970.9m: “principally reflecting” 9.9% lower volumes, subdued end-market demand, increased regional. Competition and pass-through of lower raw material prices. EBITDA came in at GBP142.1m, compared to GBP253.8m in 2022. In an update, Synthomer said: “Trading since the start of 2024 has been cautiously encouraging, supported by short-term restocking by customers, though evidence of broad-based demand recovery remains limited.”

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