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Korean tyre maker enters Pakistan market
https://nation.com.pk/Reporter/atif-khan
Atif Khan
October 01, 2018
ISLAMABAD - Tyre market may see an intense competition in coming days as South Korea’s second largest tyre manufacturer Kumho Tyre has sealed a deal with a Pakistani company -Century Engineering Industries - to transfer its tyre making technology for the next 10 years.
Under the deal, the first of its kind for a Korean rubber wheel-covering producer, Century will pay $5 million to Kumho for transferring its basic tyre manufacturing technology, to make 28 different types of tyres for passenger and commercial vehicles till September 2028.
The foreign company will also get 2.5 percent of Century Engineering’s annual sales in royalty fee for the next decade. According to insiders the contract will be renewed for another five years upon expiration.
Century Engineering started making old technology Starting-Lighting-Ignition, (SLI) lead acid and gel batteries with the brand name phoenix in 2005. Lead Acid battery was invented by French physicist Gaston Planté in 1859.
The company decided to diversify to tyre business after realising the saturation in battery market, around two years ago.
Pakistan's battery market saw a phenomenal growth during last decade, as the long hours of electricity blackouts compelled people to use available SLI batteries in their home and office Uninterrupted power supplies (UPS). SLI batteries are designed to provide high voltage current required at start an automobile for few seconds then they need to be charged. If exposed to long use- more than 40 percent of their total capacity-the thin lead plates start to break, making battery unusable. The disposable units are hard to repair.
After the gradual increase in electricity production in recent years and availability of thick lead plate- long lasting - deep cycle batteries for solar and UPS use- the SLI batteries were restricted to automobile use mainly. Cut-throat competition, availability of modern alternate secondary storage units and improved regulations were other reason to seek diversification for the relatively new company.
The Competition Commission of Pakistan (CCP) recently fined Rs1 million to Century Engineering Industries and four other battery manufacturers Atlas Battery, Exide Pakistan, Pakistan Accumulators, and Millat Industrial Products for misleading consumers about their dry and acid-lead batteries by not disclosing material information such as product capacity on the its body, packaging and warranty cards.
With robust network of existing battery sales force, the company is not eyeing new car entrants only but Suzuki, Honda and Toyota also in coming years, due to increasing bad quality perception of their existing vendor. Century is already supplying Phoenix batteries to Pak Suzuki Motors, Ghandhara Nissan cars and trucks, Al-Ghazi Tractors and Sazgar Rikshaw.
Presently most of the new local assembled cars come fitted with General tyres but the top brand has lost trust of end consumers.
Sudden multiple holes in tyres- called pin hole punctures, sudden bursts while driving, rough ride, abnormal swelling on side walls making the ride bumpy and thud sound on potholes are some of the major complaints associated with the general tyre's passenger car products. No wonder, most of the new car owners change their tyres to other brands the moment they buy a new car while remaining throw them away in next six months, despite claims that the company is producing international standard certified products.
Due to dodgy warranty policy, the biggest local rubber producer is fast losing replacement segment also. the company claim to repair the defective tyre free of cost or make reasonable allowance on pro-rata basis on the purchase of a new product, under warranty policy, but most of the buyers never get any replacement or concessions as company shrewdly blame driving or road conditions for the damage, even if claim is requested shortly after the purchase.
https://nation.com.pk/Reporter/atif-khan
Atif Khan
October 01, 2018
ISLAMABAD - Tyre market may see an intense competition in coming days as South Korea’s second largest tyre manufacturer Kumho Tyre has sealed a deal with a Pakistani company -Century Engineering Industries - to transfer its tyre making technology for the next 10 years.
Under the deal, the first of its kind for a Korean rubber wheel-covering producer, Century will pay $5 million to Kumho for transferring its basic tyre manufacturing technology, to make 28 different types of tyres for passenger and commercial vehicles till September 2028.
The foreign company will also get 2.5 percent of Century Engineering’s annual sales in royalty fee for the next decade. According to insiders the contract will be renewed for another five years upon expiration.
Century Engineering started making old technology Starting-Lighting-Ignition, (SLI) lead acid and gel batteries with the brand name phoenix in 2005. Lead Acid battery was invented by French physicist Gaston Planté in 1859.
The company decided to diversify to tyre business after realising the saturation in battery market, around two years ago.
Pakistan's battery market saw a phenomenal growth during last decade, as the long hours of electricity blackouts compelled people to use available SLI batteries in their home and office Uninterrupted power supplies (UPS). SLI batteries are designed to provide high voltage current required at start an automobile for few seconds then they need to be charged. If exposed to long use- more than 40 percent of their total capacity-the thin lead plates start to break, making battery unusable. The disposable units are hard to repair.
After the gradual increase in electricity production in recent years and availability of thick lead plate- long lasting - deep cycle batteries for solar and UPS use- the SLI batteries were restricted to automobile use mainly. Cut-throat competition, availability of modern alternate secondary storage units and improved regulations were other reason to seek diversification for the relatively new company.
The Competition Commission of Pakistan (CCP) recently fined Rs1 million to Century Engineering Industries and four other battery manufacturers Atlas Battery, Exide Pakistan, Pakistan Accumulators, and Millat Industrial Products for misleading consumers about their dry and acid-lead batteries by not disclosing material information such as product capacity on the its body, packaging and warranty cards.
With robust network of existing battery sales force, the company is not eyeing new car entrants only but Suzuki, Honda and Toyota also in coming years, due to increasing bad quality perception of their existing vendor. Century is already supplying Phoenix batteries to Pak Suzuki Motors, Ghandhara Nissan cars and trucks, Al-Ghazi Tractors and Sazgar Rikshaw.
Presently most of the new local assembled cars come fitted with General tyres but the top brand has lost trust of end consumers.
Sudden multiple holes in tyres- called pin hole punctures, sudden bursts while driving, rough ride, abnormal swelling on side walls making the ride bumpy and thud sound on potholes are some of the major complaints associated with the general tyre's passenger car products. No wonder, most of the new car owners change their tyres to other brands the moment they buy a new car while remaining throw them away in next six months, despite claims that the company is producing international standard certified products.
Due to dodgy warranty policy, the biggest local rubber producer is fast losing replacement segment also. the company claim to repair the defective tyre free of cost or make reasonable allowance on pro-rata basis on the purchase of a new product, under warranty policy, but most of the buyers never get any replacement or concessions as company shrewdly blame driving or road conditions for the damage, even if claim is requested shortly after the purchase.
