Tyre Asia April/May 2018 115
technical support and R&D
organisations. “We will continue to
invest to support growth in our tyre
business,” added Day.
Recently, the Swedish-company
opened a new laboratory to
strengthen its testing capabilities
in the field of rubber and tyre
manufacturing. The lab is equipped
with an intermeshing 1.5-liter rubber
mixer and an open mill, as well as
instruments for measuring viscosity,
curing behaviour, physical and
dynamic properties, aging, abrasion
and set.
“our laboratory is staffed with
people who have come from the
tyre industry, with expertise in
tyre manufacturing and rubber
compounding. These capabilities
enable us to have a good rapport
with customers and help us to
develop improved products for their
beneft, building on our expertise
with oils” added Day.
Along with lab testing, the company,
in the last two years, has been
conducting field testing to evaluate
its naphthenic oils’ performance in
tyres. nynas claims naphthenic oils
perform better, compared to other
tyre oils, on rolling resistance and
improved fuel economy without
affecting traction.
Being a caterer to a niche segment,
safe tyre oils, nynas possesses
certain advantages, which are
more beneficial to its customers,
according to Day. “our competitors
are large oil companies, which focus
more on fuels and engine lubricants,
and tyre oils are a marginal by-
product for them, whereas the safe
tyre oil, naphthenic oil, is one of our
core products. So we are able to
dedicate our research, investment,
supply chain, technical resources
and sales support to our customers,
and to maintain consistency in
both supply and product quality in
our wide range of naphthenic oil
products,” said Day.
Around 18% of the company’s global
sales come from the safe oil tyre
business. During the last five years,
nynas’ safe tyre oil business grew
more than 50%.
Tyre companies are also expected
to develop tyres in tandem with the
automobile oeMs’ growing emphasis
on co2 reduction and improved fuel
efficiency. “oeMs are working on
the reduction of co2 emissions and
increased fuel efficiency, particularly
in western europe and the US, and
they are putting pressure on their
tyre suppliers to work in the same
direction,” said Day. nynas caters
to all tyre segments, including PcR,
commercial vehicle and two-wheeler
tyres.
nynas has had a local presence
in India for over twelve years and
according to Day, currently within
Asia, India offers one of the highest
growth rates for nynas. however,
there are challenges lying ahead for
nynas in India. The country lacks
regulations for the mandatory use
of safe tyre oils. coupled with this,
the Indian market is still heavily
influenced by price. Day says price
sensitivity is however a global factor,
and many Indian customers are
now making their purchase decision
based on the value of the product.
“We compete by providing the
highest value to the customer, not
by providing the lowest price. Prices
play an instrumental role in the
buying decision, however customers
are not ready to compromise on the
quality. Although our products often
have a higher price, the customer
benefits with a better value, in
terms of tyre life and performance,”
explained Day. once regulations for
safe tyre oils are in place in India, it
will fuel demand for naphthenic oil
in India, thinks Day.
Two factors, its relationship with
global tyre companies, and growing
exports by Indian tyre companies
will fuel the demand for nynas’
products in India. “For international
companies with manufacturing
plants, we can sell our global grades
in India. The same grade that they
would buy in china or elsewhere
in the world. Global companies
can have an advantage of standard
formulations which they can use
across the world.” Today, nynas
supplies safe tyre oils to seven of the
top ten global tyre manufacturing
companies. however, nynas has
also been successful with local
tyre manufacturing companies on
account of their growing exports
to europe and the US, where
only safe tyre oil is used for tyres.
“Many domestic tyre companies
are focusing to develop exports to
destinations where they need to
meet strict regulations on safe tyre
oils. That’s where we find business
opportunities. In addition, once we
start supplying to a tyre company
they soon realise the value of our
products and they continue to buyour tyre oils,” explained Day.however, the speed of adaptation of
naphthenic oil is a major challenge
for nynas in India. Initially most
tyre companies’ safe tyre oil
formula was based either on TDAe
or RAe, as naphthenic oils were
a late entrant to the tyre safe oil
segment, not only in India but also
globally, with the exception of
the US where naphthenics were
already state of the art. TDAe has
the advantage of the first entrant
into the segment, whereas RAe
has a price advantage over TDAe.
“however, RAe and TDAe supply
is based on feedstock from Group
I plants which are steadily closing
and TDAe is also expensive. We
want to target the opportunity that
this will provide. We are a long term
reliable naphthenic oils supplier,
which is very important to the tyre
companies,” said Day.Since most of tyre companies in
India have been using TDAe or RAe,
the adaption process to switch to a
naphthenic alternative takes around
two years, including lab and field
testing. “But there is an encouraging
response from the Indian market,”
added Day.As a global company, another
challenge for nynas is to work in
complex markets, complying with
different regulations and policies,
“We sell in more than 100 countries,
and each country has different
regulations and policies which keep
us on toes. For an example in India,
we had GST introduced last year,
so we need to adapt to the new
regulation. Multinational companies
want to speak centrally with nynas
about their global business, but
they also want to be served in each
country by local sales and support
people. We are in a good position to
manage this complexity,” said Day.
GST and demonetisation, which
hit many industries hard last
year, worked in nynas’ favour.
The uniformity taxations due to
GST made nynas’ products more
competitive, while demonetization
impacted unorganized players
The trend for chinese tyre
manufacturers to build plants abroad
will also benefit nynas. “Three years
ago, we saw the US impose higher
tariff duties on chinese tyres, with
many chinese companies setting
up manufacturing facilities in other
countries, where we already have a
presence,” said Day.