FUTINAL ConferenceFUTINAL Conference

5-7 December 2006

Praia Grande/SP, Brazil

Michael Wolters, ICEM Chemical and Rubber Industry Officer

ContentsContents

• Forecast: natural rubber (NR) world market prices, demands and supply

• Non-tire rubber sector / newest developments

• Tire technology

• Strategic and economic approach of the mayor tire companies

• Challenges for the trade unions

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Price of Price of natural rubbernatural rubber (NR) (NR)

1120 13

51

1350

1251

1535

1819

2254

2139

0

500

1000

1500

2000

2500

2003 2004 2005 Sep-06US$ per ton

TSR 20 RSS 3

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Forecast: Forecast: NR consumption (in m tons)NR consumption (in m tons)

0

2

4

6

8

10

12

1990 2004 2010

Demand

Supply

NR shortage in 2010 at the latest!4

Use of natural rubber Use of natural rubber

• Gloves and condoms: 100 %• Truck tires: 80 %• Passenger tires: 27 %

• The tire industry as a whole needs 60 % of all NR production.

5

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Non-tire rubber Non-tire rubber products (examples):products (examples):

• Automotive hoses• Hoses assemblies• Automotive interior trim• Multiple V-ribbed belts, timing belts• Conveyor belts• Printing blankets• Sealing systems• Engine mounts• Vibration control• Air springs• gaskets

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More and more a mixture More and more a mixture between electrics, metal and rubberbetween electrics, metal and rubber

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Tire technology ITire technology I

Truck tire:

Very wide tires (30-inch) instead of two tires on one axle

Lighter tires which can be used longer (e.g durable technology by Michelin)

Less rolling resistance = less fuels

Retreated tires with better quality

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Tire Tire technologytechnology II II

• Off-the road tire (OTR) demand is strongly increasing, especially in the mining sector

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Tire technology IIITire technology III

Passenger tire:

Run-flat

Multi air chamber

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Tire technology IVTire technology IV

New production technology:

only 10 % of the former space only 1/3 of the former workers

Examples:

ATOM / Toyo tyre BIRD / Bridgestone-Firestone C3M / Michelin MIRS / Pirelli

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Strategic and economic approach Strategic and economic approach of the mayor tire companiesof the mayor tire companies

1. Bridgestone

2. Michelin

3. Goodyear

4. Continental

5. Pirelli

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Bridgestone-FirestoneBridgestone-Firestone

• Net sales (9M/2006): 17.9 billion US$

• + 13,0 %

• Profit declines

• Since 2006 the Number one of all tire makers

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MichelinMichelin

• Net sales (9M/2006): 15,2 billion US$

• + 6,4 %

• Profit decline

• Number 2 of tire makers

• New US retirement pension plan

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GoodyearGoodyear

• Net sales (9M/2006): 15,282 billion US$

• +3,3%

• Profit decline

• Still severe financial problems

• A long ongoing strike in the US since 5th of October 2006

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ContinentalContinental

• Net sales (9M/2006): 13,7 billion US$

• + 6,9 %

• Profit decline

• Figure of employees increasing (roughly 85 000)

• Closing of tire production in Charlotte, NC (USA)

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PirelliPirelli

• Net sales (9M/2006): 4,5 billion US$

• +9,1 %

• Profit decreasing

• Strong share in Latin American tire market

• IPO of ( a part of ) the tire business of the Pirelli Group is still on the agenda

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Challenges for the trade Challenges for the trade unions in Latin Americaunions in Latin America

• Goodyear’s purpose of selling Engineering Products

• What will happen to Pirelli’s shares in future

• Looking for niche products in the tire sector

• Looking for a more global strategy to save the future of the regional tire plants

• Being capable to discuss in an economic way with the local management

• Be aware of impacts and changes in other parts of the world (e.g. strikes, shifting of production to other places)

• Building capacity for a continuous process of exchange of information, coordination of actions in FUTINAL.

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