Global rubber products markets on the up

Combined sales among the world’s 50 largest non-tire rubber product makers reached $89,621 million in 2023, representing an increase of around 6% from our survey last year.

The positive sales trend contrasts with a 1.4% decline, to $81,703 million, recorded by the same survey a year ago – largely reflecting the supply-chain disruptions that impacted key markets in the wake of the Covid-19 pandemic.

Sales among European-based rubber product manufacturers reached a total of around $35.9 billion, representing a year-on-year increase of 5.3% – slightly off the overall pace seen across all global regions.

Their North American counterparts, for instance, registered a combined sales increase of 6.2%, to $25.3 billion in 2023, while combined sales among Japanese-based rubber-component manufacturers lifted 3.5% to $16.3 billion.

As was the case last year, the overall sales trend masked considerable variations in the business performance of the world’s largest rubber product manufacturers.

German-based manufacturer Freudenberg Group maintained its firm hold on top spot with estimated rubber-based product sales of $7.7 billion – a 9.6% year-on-year increase on last year’s sales figure.

Another German-headquartered manufacturer Continental retained second position: its ContiTech non-tire rubber products unit recording a more modest 3.0% year-on-year increase in sales to $6.4 billion in 2023.

With estimated rubber-product sales surging 20.2% to $5.3 billion, US-based Parker-Hannifin Corp. took third slot in the global rankings – overtaking French group Hutchinson SA which grew rubber product sales by 6.7% to around $4.9 billion.

Global rubber-based product sales at Sumitomo Riko Co. Ltd increased by an impressive 45.5% year-on-year to $4.4 billion, moving the Japanese group to fifth spot in the table, three slots above its 2022 ranking.

Retaining no 7 spot, Trelleborg AB, posted sales of about $3.1 billion to stay ahead of Cooper Standard with sales of $2.7 billion (up 11.5%) and NOK of Japan at $2.6 billion (down 15.3%).

Rounding off the top 10 was China’s Anhui Zhonding Sealing Parts, which saw sales grow by 9.0% in 2023 to reach $2.4 billion.

Elsewhere, Bridgestone dropped four spots from no 10 to no 14, posting 2023 non-tire rubber product sales of about $2.1 billion.

Further down the rankings, another noteworthy development was the progress of French tire major Michelin’s plans to grow its non-tire activities to 20% of group sales by 2030.

Rubber-based products, which represent a key element of this strategy, grew 3.9% year-on-year in 2023 to reach sales of $1,500 million – about 5% of group turnover – to lift Michelin four positions to no 22 in the rankings.

A tire maker moving in the opposite direction was Yokohama Rubber Co., which dropped five positions in the table to no 37, with total non-tire rubber product sales around $701 million, or about 10% of global sales.

Among the sectors slipping down the Top 50 rankings was the gloves manufacturing industry, which saw year-on-year demand recoil following a boom year in 2022, linked to the Covid-19 pandemic.

Australian group Ansell Ltd. fell two spots to no 19, posting rubber-based product sales for 2023 of around $1.85 billion.

But it was Malaysian major Top Glove that took the biggest hit, tumbling 25 places down this year’s survey ranking to halt in lowly 48th position, with 2023 sales of $494 million – down drastically from its $1.3 billion in 2022.

Since the start of this year, however, the Malaysian glove maker has reported signs of a rebound in its business and the global latex gloves market more generally.

Market comments

But there remains much uncertainty about the direction of global markets, with leading players reporting pressure on sales and earnings in the early months of 2024 – reflecting global economic trends, rising wage and energy costs and geopolitical tensions.

ContiTech, for one, reported that demand was “significantly down” in both its industrial and automotive businesses, especially in Europe, at the first quarter stage.

Also, the OE Solutions (OESL) business area – comprising a large part of ContiTech’s business with automotive manufacturers – did not expect any improvement until the second half.

Nevertheless, regarding full-year prospects, parent group Continental forecast a pick-up in its business performance, stating that the first quarter “will be our weakest this year.”

As the year progresses, Continental CEO Nikolai Setzer expects “improvements across the three group sectors Automotive, Tires and ContiTech.”

Meanwhile, Trelleborg Group president and CEO Peter Nilsson in April noted a “subdued performance in several market segments for the past several quarters.”

At Trelleborg Industrial Solutions (TIS), Nilsson said, the construction industry remained under pressure, while the group had also seen weaker demand in certain industrial segments.

On the other hand, project transactions for LNG-related projects continued to grow significantly, and sales to the automotive industry were also positive.

Trelleborg Sealing Solutions described deliveries to the automotive industry as “unchanged” during first quarter 2024, while sales to the aerospace industry continued to increase sharply.

But newly formed healthcare & medical products unit Trelleborg Medical Solutions (TMS) was experiencing a challenging market, linked to a protracted period of post-pandemic destocking – a trend expected to continue for “at least another quarter.”

One of the strongest current performers Standard Profil achieved a “very successful” 2023, despite “persistently high inflation rates and macroeconomic uncertainties [that] led to restrained consumer behavior in purchasing new cars,” reported CEO Dr Klaus Elmer.

Moreover, Elmer noted that demand for EVs had been impacted by reduced government subsidies in some regions, while challenges with the integration of vehicle software had delayed some product launches.

Key factors in the company’s delivery of substantial sales growth in 2023 was its ability “to successfully negotiate cost compensation agreements with our customers,” continued the CEO.

New business awards “picked up very well in Q4/2023 and amounted to Ä110.5 million by year-end... and drove up the order book to a total volume of e3.8 billion,” said Elmer.

For the current financial year, the CEO forecast that Standard Profil would “continue to grow faster than the overall market in 2024, primarily driven by several new product launches.”

Reviewing its 2023 results, Japanese major Toyoda Gosei said the automotive industry had performed “favorably, supported by stable semiconductor supply and strong demand,” and growth in electric vehicle sales in emerging markets.

Sales increased 12.5% year-on-year “mainly due to an increase in production by customers primarily in Japan and the Americas,” the company noted.

However, in its outlook for the current fiscal year, TG said profits were “expected to decline due to the impacts of lower sales and market conditions.”

For 2023, Swiss group Datwyler reported a 20% decline in earnings due mainly to low plant-utilisation rates, loss of high-margin Covid-related business and higher costs. Sales levels, however, remained stable.

The loss of Covid business and destocking weighed on revenue development and led to underutilisation of the group’s recently expanded production capacities.

Regarding its 2024 prospects, Datwyler was cautiously optimistic, expecting “revenue growth in the low single-digit percentage range” – helped by new projects at its healthcare and connectors businesses.