Editor’s Note: This article by Liana Shaw, editor of SA Treads, appeared in the December 2011 issue of that magazine.
“There are nine million bicycles in Beijing.” So go the popular lyrics made famous by soul singer Katie Melua, and pretty much what I expect to see upon arrival at the fascinating Asian nation of China.
To my surprise, the modern skyscrapers, flashy luxury cars and immaculately kept streets and highways that greet me are a far cry from the China depicted in the song. It soon hits home that the face of China has changed forever, and in a span of only 10 years.
A short connecting flight from Beijing to the coastal city of Weihai (recently voted the most sought-after city in China to live in), takes me to another thriving Chinese metropolis and the headquarters of Triangle Tyre Co. Ltd. I’ve been invited to visit the Chinese tire manufacturing giant for a close-up look at its operations and its new flagship ‘green’ TBR plant currently under construction.
I arrive at what can only be described as a majestic looking building, housing Triangle’s headquarters. The architecture is impressive as are the grounds, which are neat and beautifully landscaped and maintained, much like the rest of China.
Moreover, the building is an accurate reflection of Triangle’s long-standing presence in the market. In contrast to the majority of the nation’s tire manufacturing facilities, which were only established in the last decade, the Triangle Group boasts a rich history that dates back to 1976.
But, suffice it to say that over the last 35 years, the company has undergone a substantial transformation, from a wholly state-owned concern to one that is now preparing for a listing on the stock exchange. More important, the emphasis placed on producing a quality product has gained the respect of both the domestic market and the international community alike.
Today, Triangle tires are sold in over 160 countries, with the company supplying OE tires to almost 40 auto manufacturers throughout the world, among them FAW, Dong Feng Motor Group, Golden Dragon and Yontong Auto Corp.
Internationally, it has also established strategic partnerships with leading names such as Caterpillar, Volvo and Goodyear, an achievement that is largely responsible for its current ranking as the world’s fourth largest OTR tire supplier.
For this reason alone, I am intrigued to find out more about the company and its modus operandi. I’m particularly struck by its notable accomplishments in the export market, given China’s reputation for producing low cost products. Clearly, Triangle Tyres is not to be confused with dubious product emerging from some of China’s tire plants today. That Triangle’s products have found favor with some of the world’s most discerning buyers is testament in itself that this Chinese tire manufacturer must be doing something right.
In South Africa, we are hearing that the performance of their 29.5R25 at one of the country’s top coal mines has been outperforming the competition, with Triangle test tires recording an average of more than 10,235 hours, according to CFP’s Alida Mouton, import director of CFP Tyres, who are the exclusive distributors for Triangle Tyres in southern Africa and the winners of the TDAFA Importer of the Year Award in 2010.
Export performance is ever more astounding when one considers that exports were something that the company embarked on chiefly as a way to recoup raw material costs back in 1990, according to Lin Xiaobin, Triangle senior vice president and director of the International Trade Management Center.
He claims: “Ironically exports have come a long way since the early nineties, particularly in the OTR segment, with foreign sales largely overtaking domestic use. Presently, close on 90% of our total OTR capacity is bound for markets outside of China. So I guess, you could say that exports have become the new focus.
“Of course, in order to satisfy our foreign clients, we have focused not only on constantly improving the quality of our products but equally, on acquiring all the required international certifications such as DOT, eCe, CCC and so on. On home soil, Triangle was awarded first prize by the state for ‘National Science & Technology Progress’ and is also one of only two Approved State Level Tire Engineering Facilities in China.”
Now that I’m here I also intend to find out more about Triangle’s recent investment of an undisclosed sum in a state-of-the-art R&D center in Akron, Ohio, the only Chinese tire manufacturer to base its R&D center in
the U.S. Although not yet fully operational, I’m told that eventually the R&D center will employ around 20 skilled engineers and scientists with the aim of propelling Triangle Tyres into the future, not only as a worthy follower but as a credible industry leader.
Explains David Sun, Triangle deputy director of the international market sales department: “We are passionate about technology, hence why we chose to incorporate a geometric sphere in our company logo. Technology is what will ultimately differentiate us from the competition.”
And differentiate themselves they must, or else, stand the risk of being painted with the same brush as some of their less professional counterparts in the market.
According to Lin, out of the myriad of tiremakers presently operating in China, only a handful (10-20), can be considered as serious players.
Echoes Sun: “Chinese tire plants that do not comply with international manufacturing and distribution practices, and there are many, are not only disrupting markets abroad, they are posing a massive problem to respectable Chinese tiremakers such as ourselves, who strive to do everything by the ‘book’.
“The Triangle Group, for one, cannot afford for its reputation to be tarnished in the marketplace, nor can we afford to subscribe to the low cost practices to which they adhere. On the contrary, we need to go the extra mile in terms of employing the latest technology and equipment, which is why we upgrade our facilities and equipment on a regular basis, importing machinery from world-famous companies in Italy, Holland, Germany, the U.S. and the like. This is just one way to ensure that we stand head and shoulders above less reputable operators.”
More impressive still, in China, Triangle leads the way in ‘green’ manufacturing, so much so in fact, that the new US$465 million TBR factory (measuring approximately 350,000 square meters and built with the capacity to produce 5.6 million truck and bus tires, or 8 million passenger tires) that is being constructed in Shandong Province will be powered in part by solar energy! By sticking to the guidelines of ‘low carbon, high efficiency, being green and environmentally safe’, Triangle sets key targets in the construction of Triangle Industrial Park as green energy utilization, reduction of greenhouse gas discharge, integrated utilization of water resources, purification of smoke and gas, recycling of surplus heat, as well as information-based and automatic production.
Explains Sun: “We will generate reproducible and pollution-free solar energy for factory lighting and other daily functions so as to promote low-carbon production. Energy will also be saved (by at least 10%) via the adoption of first-phase low-temperature mixing technology, thereby upping efficiency by 20% and further improving radial tire quality.
“A new spray system will further purify odors to resolve the gas disposition issue in tire production while new technology and devices will also be embraced to recycle surplus heat and gas to eradicate gas and heat discharge. And of course, water will be recycled during production to avoid wastage.”
And last, but by no means least, the company will apply digital and visual control systems to all processes related to tire production, together with a materials flow automatic management system to promote modernized management.
With this impressive new facility nearing completion, Triangle will reach yet another important milestone in its already successful path towards becoming one of the world’s greatest tire companies.
Having gained a basic understanding of the company and its immediate goals, now I am keen to find out more about its plans for the South African and African markets.
The first thing I discover is that all tires manufactured for the African market are built to specific requirements and in collaboration with the company’s distribution partners.
Says Lin: “Our South African customers were very clear in their instructions to us to build tires that are strong, durable and suitable for their market. In order to comply, we elicited the expertise of industry specialists in 2008 to help us produce OTR tires that could stand up to the test. Since then, we are happy to say that quality has improved ten-fold, and the incidence of claims is virtually zero.
“The African market is extremely important for us, especially given recent developments in the EU and U.S. Chinese products are meeting with stiff resistance by way of import tariffs and trade restrictions in these markets, so with trading alliances hanging in the balance, South Africa plus other emerging markets are taking on even greater significance for us.”
This would explain the company’s willingness to assist its partners in our region by way of quality, tailor-made product and competitive price. That being said, although Triangle Tyres are not the most expensive in South Africa, they are certainly not the cheapest. According to Lin, the company recognizes the role that competitive pricing can play in establishing a new brand, but eventually, he says, the product has to stand alone and the retail price has to reflect the costs associated with R&D and high raw material costs.
He claims: “The price of natural rubber will continue to soar as brokers are basing the purchase price on their own desire for maximum profit.”
Apparently, the brokers are often a tricky link in the chain in that they dictate market conditions. Unlike the tire companies, they have the money to pay the rubber plantations in hard cash, placing them in the formidable position of being able to control the market. The same can be said for oil and other commodities necessary to the production of tires, which are also commanded by brokers.
As such, if credible companies such as the Triangle Group are going to continue investing in R&D and technology in order to elevate their world ranking, they have to begin commanding realistic, market-related prices for their products.
Lin explains that in China, tiremakers all tend to be grouped together into a so-called ‘Chinese box’ and this creates a problem. “We are constantly striving to extricate ourselves from this box which spells cheaply manufactured tires that are simply being dumped at low prices around the world.”
What also becomes indelibly clear to me during my visit to China is the stock placed on suppliers and partners. Both are chosen with extreme care and caution and business will only be conducted once trust and respect has been earned. Triangle in particular, attributes much of its success abroad to its foreign distribution partners, among them, Cape Town-based CFP Tyres, with whom they have built and nurtured a close alliance for the last 11 years.
So what’s next for this dynamic Chinese company? A great deal, it would seem. A number of new PCR plants are planned for construction in other Chinese provinces (again, each adhering to green manufacturing principles), radial tires for the agriculture sector are ready for testing (an exciting development for South Africa, as well) and as already mentioned, the company is well on its way to becoming a listed company on the Chinese Stock exchange.
According to Lin and Sun, their long-term aim is to achieve a top 10 ranking
among the world’s largest tire manufacturers in the next five to 10 years (currently they rank 13).
“We are proud of our proud history and many achievements along the way and are fully intent on reaching the 100-year mark, at the very least,” suggests Sun. “More important still, our goal is to transform the Company from national to international status, an achievement that is well within our reach.”
I went to China expecting to see an emerging market. Instead, I was confronted by a contemporary community that is built on a proud work ethic and tradition, not to mention a unique culture that has catapulted China onto the world stage in a very short space of time. That China has moved with the times is no under-statement. This brave and hard-working nation has risen above extreme oppression to become the world’s second largest economy, a place, which in my opinion, it richly deserves.