Industry expects more business opportunities from green tires


DUSSELDORF, Germany ― Germany-based specialty chemicals company LANXESS celebrates the annual “rubber day” in September. To mark 102 years of synthetic rubber, the company held a business conference in this German city on Sept. 21.

The event came at a critical time this year ahead of the compulsory introduction of a new standardized level for tires in Europe next year, fueling anticipation about growing demands for eco-friendly, high-performance tires.

“The new tire-labeling system will be a game-changer in the market,” Christoph Kalla, head of global marketing at the performance butadiene rubbers business unit of LANXESS, told The Korea Herald.

“Unfortunately, a tire is typically round and black. Consumers could rarely feel the improvement. But the new scheme will make tire performance more visible and transparent.” 

Under the tire label system, tire makers for cars and trucks are required to specify fuel consumption, wet grip and noise classification of their products by means of a sticker or label.

Just like existing energy-efficiency labels used on white household goods, the plan will help consumers better understand safety and environmental performance of tires.

With similar discussions underway in other advanced countries, Korea is also considering its compulsory adoption based on the EU-model in November 2012.

“Tire production and raw materials make up 15-20 percent of total resources used for CO2 emissions. And the remaining 80 percent is generated during the use of tires,” Kalla said.

“The value (of tire label) in the end is defined by its total environmental impact.”

Now related industries have high expectations about the business potential of eco-friendly high-performance tires. And one of them is LANXESS, the world’s second-largest manufacturer of butyl rubber ― a key material for “green tires.”

According to the company, the global tire production is expected to increase from the current 1.6 billion to 2 billion by 2015.

With the new tire labeling initiative, the company predicted, the market share of higher-performance green tires also would grow from 35 percent to 50 percent.

LANXESS has already stepped up efforts for research and development activities, spending 130 million euros ($175 million) this year alone. Its R&D workforce is currently totaled at 700 globally.

The company has also strengthened its production capacities for high-performance rubber in Europe and South America, with a new 200 million-euro plant scheduled to be completed in Singapore by 2015.

“Companies that have continued to focus on R&D will see a payoff,” Kalla said. 

Korea is also an important market for LANXESS given the strong performance of its carmakers around the world, he said.

The company, which established its Korean branch in 2007, has recently renewed a five-year contract with Hankook Tire, Korea’s largest tire maker, which is ranked eighth globally.

“Korean tire makers are very ambitious. Because they have already produced state-of-art products, they will play a leading role in the high-performance tire market as well,” he said.

Despite heightened uncertainties surrounding the global economy along with soaring prices of raw materials, Kalla showed confidence about the growth of high-performance tire market and his company in the coming years.

“In the end, everybody would want high-performance premium tires. It’s a little bit like a telephone. Nowadays people seem to be willing to pay for smartphones like the iPhone,” he said.

LANXESS was founded in 2004 when Germany-based Bayer, the inventor of synthetic rubber, spun off its chemical operations. In 2010, the company logged in 7.1 billion euros in sales, a 41 percent growth from a year earlier. 

By Lee Ji-yoon, Korea Herald correspondent
(jylee@heraldcorp.com)