Dialogues Between Chiefs of Tire Enterprises, Revealing Dreams and Feelings of Entrepreneurs

19 February 2019 | Source from China Rubber Journal

◎ Hao Zhangcheng

“This meeting is held in a special background.” It was held in Ningbo, Zhejiang from November 13 to 15, 2018 the Fifth Session of the Ninth Executive Directors Enlarged Meeting of China Rubber Industry Association & the 19th National Rubber Industry Information Conference. At the meeting, Deng Yali, president of China Rubber Industry Association (hereinafter referred to as CRIA), believed that the current world economic situation was complicated and changeable, the trade frictions provoked by the United States have risen sharply and external challenges have increased markedly; Chinese economy was undergoing profound structural changes, transferring from stage of high-speed growth to process of high-quality development.

Facing the stress of economic downturn, four chiefs of tire enterprises have accepted an interview with Xu Wenying, vice president and secretary general of CRIA. Although the content of the dialogues was cases of events or activities of individual entrepreneurs concerned in the industry or of enterprises they were in, through experience sharing and idea colliding, the national entrepreneurs’ concerns about the industry were revealed, delivering a strong signal that key advantage enterprises would keep in step with the change of time and would act actively.

 

Resources and Dreams, 63-years-old Yuan Zhongxue Starts off Again


Yuan Zhongxue, Chairman of Sailun Group Co., Ltd.
Executive Deputy Director of National Engineering Research Center for Rubber and Tire (hereinafter referred to as NERCRAT)

In 2000, Yuan Zhongxue served as the chairman of MESNAC Co., Ltd. By utilizing the idea of transforming traditional industries with informatization, he has lead MESNAC to great success, and made tremendous contributions to helping the industry in intellectualization and informatization. However, on June 25, 2018, Yuan Zhongxue resigned as chairman of MESNAC Co., Ltd. and took the office of chairman of Sailun Jinyu on September 10. To transfer from rubber machinery industry to tire industry at the “advanced age” of 63, what’s the consideration?

Facing host’s question, Yuan Zhongxue said: “I confess.” At present, the industry has witnessed MESNAC’s achievements in the field of intelligent equipment, informatization and new materials application. As the founder of MESNAC, there is little development space for an individual who has achieved such level now. However, on the other hand, MESNAC is only an enterprise with billions of production value after all. It still needs to be grafted and enlarged. Currently, MESNAC has found a partner with German background and great prestige. On the basis of MESNAC, they can not only graft international advanced technologies, but also integrate concepts such as new materials and new energy making use of the platform of listed company, so as to enlarge the market, and to allow shareholders and employees to get more value returns and equity returns. “Personally, I transferred to the tire platform in the key stage of the industry with basic research, analytical testing, material formulation structure and other technical tools, bending over, calming down, steadily doing a good job in scientific research and making a good strategic planning.”

It is the dream of Yuan Zhongxue to “test a good tire to provide for and share valuable information with the industry chain”.

 

Embracing Digitalization, Zhongce Rubber “Runs to Cloud”


Shen Jinrong
Secretary of the Party Committee, Chairman and General Manager of Zhongce Rubber Group Co., Ltd.

Since 2000, Shen Jinrong has become the helmsman of Zhongce Rubber Group Co., Ltd. After more than 10 years of steady development, the sales revenue of Zhongce Group has grown from more than RMB 2 Billion Yuan at that time to more than RMB 20 Billion Yuan today, which has become the largest tire manufacturing enterprise in China and has entered the top 10 of global tire industry. In the industrial chain such as R&D, quality inspection and production, Zhongce Group has accumulated a large amount of information data. How to effectively deal with mass data, however, has become a practical problem. Since 2016, Zhongce Rubber has cooperated with Alibaba Cloud, officially “migrating to cloud”. The advantages have continuously showed up.

Xu Wenying asked: “How is the investment cooperation between Zhongce Group and Alibaba Cloud in digitalization? What effect has been achieved?”

Shen Jinrong replied that China’s tire industry, including Zhongce Company, has always taken a route of intelligent manufacturing from automation, informatization to intellectualization, and cooperated with a large number of domestic and foreign enterprises. It should be said that China’s tire manufacturing level is already very close to the level of world’s advanced level.

How does China’s tire industry reach the world’s advanced level, how does tire technology change from “following” tactics to “leading” tactics, from overtaking by “changing the lane” to “corner overtaking”? In the past two or three years, Zhongce Company has studied and determined the development direction of China’s tire industry in detail and made important strategic thinking. From many technological paths, artificial intelligence, big data and cloud computing have been chosen as “sharp weapons” to catch up. Hope to take this opportunity to improve product quality and level.

For example, the raw material for tire industry is natural rubber. We count and analyze the discrete data of tens of thousands of rubber trees to make products that are exactly the same as those designed by the designers. We have actively discussed and explored this. And so on, some problems in tire manufacturing process can be easily solved. “The cooperation with Alibaba Cloud and the research we do indeed guide our direction.”

“The return on investment is huge, but it’s invisible. All the inputs and outputs are in the cloud. There may be no savings in terms of cost, but the quality of the product is improved. Our philosophy is ‘data is worth more than gold’.” Shen Jinrong said.

Alibaba Cloud ET Industrial Brain performs deep calculation and analysis on various data of production end of Zhongce Rubber, and gives a solution combination of optimal utilization of resources. For example, raw materials from which places of origin can be combined to have the best quality, and what kind of parameter ratio can be used in a certain process to make the processing performance of rubber compound more stable, finally improving the qualified rate of rubber compound by 3%-5%. In addition, big data goes deep into the global procurement of Zhongce, more accurately and intelligently controls production and processing, and introduces technologies such as visual recognition and deep learning into the inspection process in manufacturing, thereby improving the detection accuracy of products to an artificially insurmountable level.

In addition to cooperating with Alibaba, in 2017, Zhongce Group built a cloud network intelligent service system in automotive after-sales service market. In addition, with “Zhongce Auto Space” as the entry point of the brand, model of chain operation is applied, as well as mobile Internet technology, big data analysis, intelligent vehicle parts matching system and other technical means, to create an automotive after-sales market OAO service platform.

Digital technology allows production data to “speak”. Relying on ET industrial brain, Zhongce Rubber uses “intelligence” and “big data” to string the entire industrial chain and accelerate the industry to the high end.

 

“Snake Swallowing Elephant” Is Not a Myth, and Doublestar Recreates Legend of 1+1>2


Chai Yongsen
Secretary of the Party Committee, Chairman and General Manager of Doublestar Group Co., Ltd.
Chairman of Qingdao Doublestar Co., Ltd.

Since May 2013, Chai Yongsen has served as the chairman of Doublestar Group. It takes two years for him to handle the “Snake Swallowing Elephant” case of acquisition of Kumho Tire which makes a stir in the tire industry. The host asked: “What is the starting point for holding Kumho Tire?”

Chai Yongsen said that Kumho Tire was once ranked among the top 10 in the world and had a production history of 58 years with passenger car tire as the leading product. Doublestar’s acquisition of Kumho Tire is mainly based on its advantages in brand, network, products and technology. The cooperation between the two parties will not only create no conflicts, but also create synergistic effect by giving full play to Doublestar’s advantages in the field of truck and bus tire and Kumho Tire’s advantages in the field of passenger car tire.
Chai Yongsen explained the work progress after acquisition: “After the completion of delivery on July 6, 2018, Kumho Tire set up a new board of directors, and its management team remained independent and continued to operate Kumho Tire. Now, Doublestar has begun to use the channel of Kumho Tire to sell truck and bus tires.”

Announcement issued by Qingdao Doublestar Co., Ltd. on October 31, 2018 shows that in order to give full play to the synergistic effect of Doublestar Tire and Kumho Tire, and to improve the market share and brand image of Doublestar Tire in the domestic and foreign markets, the two parties have reached a cooperation intention. They propose to take advantage of Kumho Tire’s advantageous sales network and influence at home and abroad to sell Doublestar’s tires and to expand the company’s sales scale. The cooperative sales amount does not exceed USD15 Million.

“The synergy and integration of the two companies will not be a simple 1+1>2, but will bring a multiplier effect. The key is whether everyone agrees with the same strategy and implements a unified code of conduct.” Chai Yongsen finally said.

 

Comparison Makes Progress, Wang Feng from AEOLUS Unifies Knowing and Doing


Wang Feng
General Manager and CEO of AEOLUS Tyre Co., Ltd.

Resigning as chairman of the board on March 15, 2016, and being appointed as general manager and CEO of AEOLUS on March 15, 2018, where has Wang Feng been in the two years? After his return, current profit of the second quarter was achieved, and at the end of the third quarter, loss was turned into profit. How did it be done?

“Actually, I didn’t really leave the tire industry,” Wang Feng replied. During this time, he once worked at Pirelli’s headquarter in Milan as senior strategic consultant for Pirelli Tyre Company and chief integration manager for Pirelli Industrial Tyre Company. During the period, he learnt and understood a lot of new and valuable things. There is a comparison to know the gap, and only knowing the gap could make improvement.

For example, such pain spots are often encountered in the work: when promoting overseas business and studying competitors, it is very sad to find that competitors are always our brother enterprises wherever we are. Compared with price of international first-class brands, India has several companies with a slightly cheaper price of 10%~15%, but our brand is 30% lower unexpectedly. The quality and technology of Chinese products are already in the forefront, but they cannot be sold at a good price. It can’t help but sigh when will China’s tire brands be recognized by global consumers and become world-class famous brands?

“Thanks for the organization’s arrangement and trust in me, but the challenge is really huge.” Wang Feng said that in the past two years, AEOLUS Tyre has undergone great changes through benchmarking and integration with Pirelli, and the operating model has also changed from previous several companies to current “headquarter + bases”, which are all in the market of the listed company. Just like a doctor, when he works for a long time, it is easy to know where the focus is. Since the beginning of this year, AEOLUS Tyre has steadily promoted the integration of headquarter functions and the transformation & upgrading of the bases to factory functions. In the overseas market, we have adjusted and optimized the business layout of overseas markets and continuously increased the proportion of high-profit products. According to the strategic positioning of the company’s export market brand, the average selling price of tire exports remains at the forefront of Chinese enterprises. We carry out in-depth the digestion and absorption of Pirelli technology, increase the added value of products, and accelerate the transfer and implementation of Pirelli technology. At the same time, with the theme of “improving quality, reducing costs, integrating and increasing benefits”, we continue to promote deep integration and business synergy, and further strengthen the centralized management and operation efficiency of procurement, sales and finance functions, improvement.

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