THAILAND: IRC set to tap fast-spinning tyre market

Inoue Rubber (Thailand) Plc forecasts a healthier outlook for the local motorcycle-tyre replacement market this year, in line with the growth of the motorcycle market due to the economic recovery, higher crop prices and new model launches.

However, some risk factors such as volatile raw material costs and natural disasters abroad and at home, especially the devastating floods in the southern part of Thailand and the earthquake in Japan, will have an impact in the short and medium terms, said IRC president Pimjai Laochinda.

The factories in Japan damaged by the earthquake and subsequent tsunami last month are being rehabilitated rapidly so that the projected harmful effects on production and marketing in the Thai market will be minimised, she said. SET (Stock Exchange of Thailand)-listed Inoue Rubber, which manufactures elastomer parts, motorcycle tyres, motorcycle tubes and wheel set assemblies under the IRC brand, aims to increase its sales by 5% in its financial year ending 30 Sept 2011, in line with the 5% growth projection of the motorcycle market to 1.8 million units this year.

Sales last year grew 18% year-on-year to 5.5 billion baht. The better-than-expected growth was due mainly to the steady launches of new tyres, the result of the company's active reseach and development of its products, said Ms Pimjai.

The Thai-Japanese Inoue Rubber recently launched IZR, a new model of IRC motorcycle tyres, targeting high-end customers.

The new model is produced for all types of four-stroke engine motorcycles, ranging from the family type to the 250cc big bike model.

"Over the past 40 years, the company has gathered experience and relevant information. The IZR model has been produced to satisfy consumers' needs, especially those looking for higher-performance tyres," said Ms Pimjai.

Inoue Rubber has two production facilities, one in Ayutthaya and the other in Pathum Thani, making on-road, off-road, scooter and heavy-duty tyres.

Inoue Rubber posted net profit of 50.43 million baht in the first quarter ending Dec 31, 2010, a 52.1% year-on-year decrease, because of an 18.96% surge in raw material costs, especially the prices of natural and synthetic rubber. Natural rubber prices in the first quarter rose 51% year-on-year to an average of 128.27 baht a kilogramme.(Syed Rashid Ali, Karachi, Pakistan)