Download - SA TREADS

Focus on • 15
but is now climbing again. However, the price of energy escalated
dramatically, as has the cost of labour, steel and specialised chemicals and
additives, not to mention the weak rand. Unfortunately all the manufacturers
purchase raw materials from similar sources and as we cannot control the
cost, it will inevitably have to be passed onto the consumer.”
Pirelli Tyres also made mention of the raw material purchasing price
and said they were hoping to keep these costs down through rigorous
renegotiation of raw material purchasing agreements as well as by taking
advantage of a phase of falling prices.
When asked how they planned to remain competitive in the face of
looming price increases and decreased consumer spending, improving
plant efficiencies topped the list with all four local tyre makers.
Says Daniels: “South Africa is moving from an exporter of raw materials to
an exporter of finished goods in the quest to become a truly competitive
participant in the global economy. To this end, plant efficiencies are part
and parcel of every manufacturing plant in South Africa if we are to remain
cost competitive.”
Echoes de Villiers: “Management of cost and production efficiencies
will always be the tools to remain efficient. Balancing supply and
demand from both the local and export markets is and will remain the
responsibility of management. This is part of an ongoing improvement
process, irrespective of the economic situation.”
Adds Ceneviz: “We have several plans in place to bring our plants’ output
and efficiency in line with market demands. As our major endeavour is to
maintain jobs, we are also exploring other options.”
Alessandro Marchi, Managing Director of Pirelli Tyres SA concurs:
“Globally, the Pirelli group has begun a profound restructuring plan
as a way of confronting the effects of the current economic climate,
the aim being, to guarantee conditions of maximum efficiency and
competitiveness. This will be achieved through rationalisation of
manufacturing structures, savings from lower energy costs and logistics
and growth of manufacturing capacity in emerging markets such Latin
America, Turkey and Romania.”
Cheap imports may not decline
Providing some likely respite for local manufacturers is the anticipated
decline in the sale of imports courtesy of a weaker rand, although some
suggest the current economic climate will have little or no effect on the
demand and supply for cheapies.
Explains Arthur Chaumuzeau, Marketing Manager for Michelin Tyres SA:
“The South African market is not as attractive as it used to be due to