High rubber prices allow tire companies to choose long vacations

This Spring Festival staff will be "easy but helpless"

Natural rubber prices hit new highs, and tire companies are suffering. The reporter learned that most tire companies plan to extend the holiday period for the Spring Festival in 2011 and plan to suspend production for half a month. Tire enterprise employees will usher in the "easy but helpless" Spring Festival.

A molding worker who works at Huanan Tire & Rubber Co., Ltd. told the reporter that the company has sold tires for many years. In the past, the Chinese New Year generally took a holiday for three to five days. Because the work unit is far from his hometown, he did not return to his hometown for the New Year. In 2011, the company has notified the Spring Festival more vacations. He is ready to go home for a good number of years.

Zou Yongzhi, general manager of Huanan Tire & Rubber Co., Ltd., said that according to the current purchase of rubber rubber prices and the sale of tires at the current market price of tires, tire companies will no doubt lose money. "With less production, there will be less loss. Enterprises will choose more vacations during the Spring Festival and equipment maintenance. It is a last resort and the most feasible choice at present."

Aeolus Tyre Co., Ltd., Shuangqin Group Co., Ltd., Hangzhou Zhongce Rubber Co., Ltd., Guizhou Tire Co., Ltd., Triangle Group, Shandong Linglong Tire Co., Ltd., South China Tire & Rubber Co., Ltd., and other major tire manufacturing companies in China On January 5, 2011, they stated that they will extend the holiday time for the Spring Festival and plan to suspend production for half a month.

According to Wang Feng, general manager of Fengshen Tire Co., Ltd., the internal potential of the company cannot digest the rising cost factor, and the prices of tires for trucks, construction machinery manufacturers, and maintenance markets cannot be continuously adjusted. Therefore, while the country is called upon to take effective measures to suppress the price of rubber, it is a kind of corporate self-help behavior.

Cai Weimin, secretary general of the tire division of the China Rubber Industry Association, said that the reduction of production and production of tire companies in China began last year, and by the end of 2010, this trend was even more pronounced. According to the latest statistics from the Tire Division on China's 10 major tire companies, in December 2010, there were 7 companies with a month-on-month drop in output, with one flat and two slightly increasing. The overall decline rate reached 3.6%, and individual companies fell by more than 20%.

After entering the New Year, tire companies have more limited production. At present, many production capacity of tire companies in Shandong remains at around 80%, and there are almost no full-load production companies. 20% to 30% of production lines of Chaoyang Langma Co., Ltd. stopped production and overhauled. China National Chemical Industry Guilin Rubber Company's all-steel tire has been discontinued for more than a month. Huanan Tire All steel tires were also shut down for maintenance for some time due to high rubber prices. Since quite a number of companies choose to take a holiday earlier this year or postpone the closing of the Spring Festival this year, it is expected that the tire production in January and February 2011 will decline significantly.

It is understood that while bearing the high rubber prices, the tire company's inventory also showed a substantial increase. According to statistics of 43 member units of China Rubber Industry Association Tire Branch, at the end of November 2010, total inventory of enterprises reached 14.55 billion yuan, an increase of 29.6% year-on-year, of which domestic-funded enterprises increased 40.9% year-on-year. The inventory of several tire companies in Guangrao, Shandong Province increased by more than 200% year-on-year.

The increase in the company's inventory directly affects cash flow, and the company's general funding is tight. According to some rubber machinery sales personnel who paid back to the tire companies, this time of year was the golden time for repayment, but it was very difficult for the 2011 payment. Sales personnel can only shake their heads in the face of tires accumulated in tire factories. "The country should have shot this time." This is the most heard statement in the interview.