China to Play a Role in Sibur’s Growth

Exhibiting alongside the Xarello Group, an important export agent for Sibur Russian Tyres, the Russian manufacturer and the overseas wholesaler were not seeking to raise their profile with Chinese consumers, nor were they looking for local agents to distribute tyres. So what exactly then attracted the two companies to an exhibition in Shanghai?

Xarello Group CEO Igor Degtyarev was able to shed light on the decision to attend CITExpo. “We are looking for customers mainly in Europe and the Middle East, but decided to come here to CITExpo as China has become such an important market and the exhibition attracts many overseas visitors.”

As previously quoted statistics show, 41% of all visitors to CITExpo came from outside of China, and thus the two Russia-based companies were well placed to form business links with industry participants from all regions, not just those possessing a direct connection with China. The CEO indicated his surprise that more international companies had failed to see the benefits of exhibiting at a venue with such a strong international following.

The export agent for SRT’s products – it is not permitted to perform this role within Russia – is based in Moscow, and has several offices in Europe; Xarello Tyres in Gdansk and Warsaw, Poland, and Wholesale Tyre Company B.V. in Utrecht, the Netherlands.

At CITExpo, the company was primarily displaying the SRT TyRex range, which Degtyarev views as one of his company’s flagship offerings. The first TyRex AllSteel TBR tyres were produced at the SRT Yaroslavsky facility in Yaroslavl, Russia in September 2006, and following the completion of a planned upgrade the company anticipates an annual TyRex TBR capacity of over 1 million units by the end of 2009 (currently it is 370,000 units per year). Numerous TyRex TBR products for every axle position were on display at CITExpo. A number of examples of the broad TyRex Agro range were also represented at the Shanghai show.

Some 30% of SRT’s production is exported by Xarello to overseas markets, and demand exists for this percentage to increase. Much of this export production at present is accounted for by the Commonwealth of Independent States, the Middle East, Western and Central Europe. The increasing importance of Europe as a market and the desire to make further inroads here led to the opening of a subsidiary office in Berlin, Germany in July. The main function of this new SRT subsidiary office in Germany is product promotion and sales.

But securing new international customers for the Russian made tyres through Xarello was not the only reason for coming to Shanghai. Such has been the success of the TyRex range that another need has arisen in recent times. “At CITExpo we are also interested in finding Chinese partners for manufacturing tyres for us here in China, as our capacity in Russia is fully reached,” explained Oleg Kataev, head of SRT’s Export Department.

The company has also in recent months announced plans to establish a brownfield or greenfield joint venture with a foreign partner in Russia. Currently SIBUR is producing 11 million tyres per annum in Russia and Xarello’s demand for more can only be met through a further upgrade of the company’s facilities or through outsourcing. Sibur is viewing this second option as highly viable, and China is number one on its list. No comment was made regarding the company’s success in finding a partner at CITExpo.

Any such partner would naturally need to meet the quality standards expected of SRT; at the end of September the company’s Yaroslavl Tyre Plant was awarded ISO/TS 16949:2002 certification, and SRT reports that the attainment of this independent certification – which specifies the quality system requirements for the design, development, production, installation and servicing of automotive related products – will permit the factory to participate in the submission of tenders for the supply of original equipment tyres to international vehicle manufacturers.

In its home market TyRex truck radials are reportedly fitted as OE to MAN, Volvo, Scania, MAZ and KamAZ vehicles. With demand from export markets increasing, and with the proposed addition of capacity in China and planned joint venture with a foreign tyre manufacturer in Russia, it may not be long before the SRT name becomes a familiar one on the Western OEM scene.

The Goodyear Tire & Rubber Company said its first quarter 2024 sales were $4.5 billion, with tire unit volumes totaling $40.4 million. For the first quarter, Goodyear's net loss was $57 million compared to a Goodyear net loss of $101 million a year ago. Leadership said the year-over-year improvement was driven by increases in segment operating income. The 2024 period also included items like, on a pre-tax basis, Goodyear Forward costs of $28 million and rationalization charges of $22 million, compared with pre-tax rationalization charges of $32 million in 2023. Goodyear said Goodyear Forward costs are comprised of advisory, legal and consulting fees and costs associated with planned asset sales.