Leading local rubber firms are ramping up efforts to reduce the dominance of foreign players in the domestic radial tyre market, the Vietnam Investment Review (VIR) has reported.
One year after Danang Rubber JSC (DRC) was the first to step foot into Vietnam’s radial tyre market, early last year, Southern Rubber Industry JSC (Casumina) put its own all-steel truck tyre manufacturing plant in the southern province of Binh Duong into service, which has a much bigger scope than that of DRC.
Casumina’s project, with a 3.3 billion USD investment, was reported to consist of three phases. The first has an annual capacity of 350,000 tyres for domestic consumption and export, the second (from now until late 2015) ups capacity to 600,000 and the third phase will see capacity reach 1 million per year.
Casumina estimates that once the plant reaches full capacity it would generate 5 trillion VND (238 million USD) in annual revenue, helping to turn the company into a leading player in the Southeast Asia.
DRC’s radial tyre project, with 2.9 trillion VND (138 million USD) in total investment, consists of two phases. The already operational first phase has an annual capacity of 175,000 tyres a year. It will increase this each year to reach 600,000 by 2018.
When its plant was commissioned, DRC said it was the largest scale project in Vietnam’s auto tire industry and would aim to gradually replace imports.
Though the company is strong in manufacturing bias and specialised OTR tyres, radial tyres are now being established as its standard.
According to the Vietnam National Chemical Corporation (Vinachem) – the parent company of DRC and Casumina – radial tyre plants are pushing forward the local rubber industry and tyre sector toward reducing imports, diversifying product lines and increasing the commodity value of Vietnamese rubber.
In fact, with their advantages of durability, safety, light weight, and less friction, radial tyres are becoming increasingly popular in auto tyre production.
In the US, Japan and France, nearly all tyre manufacturers have shifted into making radials, and in Asia the rate is similarly high – 90 percent in Malaysia and 50 percent in China, according to figures from Casumina.
But this is only around 10 percent in Vietnam, but is expected to reach 100 percent in the next 20 years.
Given such potential, local firms are ambitious about taking over the market from foreign players.
In September 2013, Casumina rolled out its line of semi-steel radial tyres comparable to those of foreign producers, but only 80 percent of the price of imports, and it stepped this up with the opening of its all-steel radial truck tyre plant.
According to Hanoi-based The Gioi Lop (Tiresworld) Company – a distributor of global tyre brands in Vietnam – China is a world leading radial tyre producer in terms of volume and a heavyweight competitor in terms of sales.
One problem faced by both DRC and Casumina is how to turn out high-grade tyre products that satisfy increasingly stringent market requirements.
Casumina and DRC hold around 60 percent of general tyre and tube market share (Casumina 33 per cent and DRC 25 per cent). They are also leading players in the domestic market with Casumina holding 8 percent and DRC 13 percent of market share, the VIR cited the firms’ 2013 reports as saying.-VNA
One year after Danang Rubber JSC (DRC) was the first to step foot into Vietnam’s radial tyre market, early last year, Southern Rubber Industry JSC (Casumina) put its own all-steel truck tyre manufacturing plant in the southern province of Binh Duong into service, which has a much bigger scope than that of DRC.
Casumina’s project, with a 3.3 billion USD investment, was reported to consist of three phases. The first has an annual capacity of 350,000 tyres for domestic consumption and export, the second (from now until late 2015) ups capacity to 600,000 and the third phase will see capacity reach 1 million per year.
Casumina estimates that once the plant reaches full capacity it would generate 5 trillion VND (238 million USD) in annual revenue, helping to turn the company into a leading player in the Southeast Asia.
DRC’s radial tyre project, with 2.9 trillion VND (138 million USD) in total investment, consists of two phases. The already operational first phase has an annual capacity of 175,000 tyres a year. It will increase this each year to reach 600,000 by 2018.
When its plant was commissioned, DRC said it was the largest scale project in Vietnam’s auto tire industry and would aim to gradually replace imports.
Though the company is strong in manufacturing bias and specialised OTR tyres, radial tyres are now being established as its standard.
According to the Vietnam National Chemical Corporation (Vinachem) – the parent company of DRC and Casumina – radial tyre plants are pushing forward the local rubber industry and tyre sector toward reducing imports, diversifying product lines and increasing the commodity value of Vietnamese rubber.
In fact, with their advantages of durability, safety, light weight, and less friction, radial tyres are becoming increasingly popular in auto tyre production.
In the US, Japan and France, nearly all tyre manufacturers have shifted into making radials, and in Asia the rate is similarly high – 90 percent in Malaysia and 50 percent in China, according to figures from Casumina.
But this is only around 10 percent in Vietnam, but is expected to reach 100 percent in the next 20 years.
Given such potential, local firms are ambitious about taking over the market from foreign players.
In September 2013, Casumina rolled out its line of semi-steel radial tyres comparable to those of foreign producers, but only 80 percent of the price of imports, and it stepped this up with the opening of its all-steel radial truck tyre plant.
According to Hanoi-based The Gioi Lop (Tiresworld) Company – a distributor of global tyre brands in Vietnam – China is a world leading radial tyre producer in terms of volume and a heavyweight competitor in terms of sales.
One problem faced by both DRC and Casumina is how to turn out high-grade tyre products that satisfy increasingly stringent market requirements.
Casumina and DRC hold around 60 percent of general tyre and tube market share (Casumina 33 per cent and DRC 25 per cent). They are also leading players in the domestic market with Casumina holding 8 percent and DRC 13 percent of market share, the VIR cited the firms’ 2013 reports as saying.-VNA
