If there was one major global tire company that remains a quiet mystery, it is clearly Sumitomo Rubber Industries. With $7.8 billion in tire sales last year, SRI is the fifth largest tire and rubber company on the planet and the second largest tire company in Japan.
In its home market, SRI is a well-known corporation, and its Dunlop and Falken brands make it a strong No. 2 to Bridgestone with more than 30%combined marketshare.
In North America, SRI is represented by its Falken, Sumitomo and Ohtsu passenger, performance, light truck/SUV and medium truck tires.
Tire Review had the rare opportunity to visit SRI at its Kobe, Japan, headquarters for a whirlwind half-day tour of its main technical center and an interview with senior executive officer Yasutaka Ii, who is primarily in charge of SRI’s overseas tire operations. He was accompanied by Yasushi ‘Tank’ Tanaka, SRI executive officer and former head of Falken Tire Corp. in the U.S.
Vision 2020 is SRI’s new roadmap for how it will conduct business and orient its attention in the coming years. Released a few months ago, the new multi-year, multi-pronged plan focuses on where SRI sees it best growth opportunities.
“We are confident that we can achieve our long-term goals,” Ii (pronounced “ee”) said.
There are three “major components of the plan – our growth engines,” he explained. SRI sees opportunity in growing via market expansion, by technology evolution, and through category innovation. It is the first two of these that directly impact its tire operations, though innovation remains a key driver of the company’s tire efforts.
Market expansion, Ii said, involves growing business in emerging markets, like the Middle East, Russia, India, Southern Africa and South America. Currently, SRI is building tire plants in Turkey and Brazil, and is considering additional plants as growth opportunities allow, he noted.
China poses the greatest opportunity, Ii said, and SRI notes that China tire consumption has well exceeded industry predictions, leaving a lot of room for individual companies to grow.
Further, growth can be had by taking advantage of unique but restricted situations, Ii pointed out. For example, SRI points to growing rice production in the ASEAN region, which creates added demand for certain agricultural tires.
Technology evolution – product development to support sustained growth, as Ii put it – focuses on those technologies of keen interest in each global region. Instead of taking a blanket approach and pushing one technology everywhere, SRI wants to take a more measured approach to better meet the needs of specific markets.
SRI’s prime focus is to establish “second to none” technologies and “accelerate the pace of development,” he said. That means considering new raw materials, faster commercialization of new tires, enhanced global R&D efforts. SRI is already doing some of those with its efforts at creating a 100% fossil-fuel free tire, and with its 4D Nano Design and use of “high performance materials.”
Growth through innovation, Ii noted, is more oriented to the non-tire sides of SRI’s business, which make up some 15% of the company’s total revenue. SRI sees growth opportunities in golf gear (Cleveland Clubs, Srixon golf balls), health care products, vibration control technologies for housing and commercial buildings, and more.
Strong Tier 2 Brand
Ii said that SRI sees Falken as “one of the strongest Tier 2 brands in the U.S.,” and wants the brand to reach that level in Canada. Currently, Canada is serviced from Falken Tire Corp. in Southern California, it was noted, but that company’s product offering has notably expanded beyond the perception that Falken is a “niche market brand.”
“Now we have top tier products in all categories – passenger, light truck and medium truck/bus,” he said.
The Sumitomo brand “has a long history in the U.S., more than 50 years,” Ii said during an interview. “We want Sumitomo to be the customer’s most trusted brand. We want both brands to be successful in the U.S.”
Ii said that Falken’s coverage “is better than before,” but “we understand that we need to do more” to position Falken as a complete supplier. Toward that end, he said, all of its medium truck/bus products are being converted to the Falken brand, “and we expect to add new products at all axle positions,” Ii said, including the company’s first super wides.
“Business in North America is the same that other tire companies face, “ Ii said, particularly the intense competition from Chinese brands and other non-RMA imports.
“To stay on top you need very diversified distribution network and unique products to meet the needs of a unique market. The key is to move faster than the others to react to market changes. Perhaps half a step is enough.”
New Production System
In a separate meeting, SRI R&D officials provided some background on the tiremaker’s new NEO-T01 fully automated manufacturing process. The NEO-T01 is a complete front-to-back robotic system, integrating every process from mixing through curing, without human intervention and minimizing opportunities for uniformity issues with finished goods.
The automated system is said to improve high-speed uniformity by 70%, reduce tire weight by 10%, and improve rigidity by decreasing speed-related ‘growth’ by 50%.
The objective, as with Pirelli’s MIRS and Michelin’s C3M systems, is greater precision for high-end replacement and OE consumer tires.
Currently, a single NEO-T01 unit – measuring 25 meters by 15 meters – is functioning, located at SRI’s massive plant in Shirakawa, Japan. That unit is still in testing, but company officials said it will be in commercial production next year, starting with Dunlop brand run-flat tires.
