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How the Tyre Manufacturing Industry and Tyre Raw Materials Will be Affected by Brexit
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In June 2016, the UK populace voted in a referendum (Brexit) to leave the European Union (EU). The effects of the vote began to be felt immediately in financial markets. Every industry will ultimately be affected by Brexit, once the terms of Brexit have been agreed and finalised between the UK and EU.Since the Brexit vote, Frost & Sullivan has been following the impact that it will have on a range of industries, including the Chemicals & Materials industry. Previous studies looked at how it will affect the Plastics & Coatings industry, and the PPE industry. The main raw materials used in tyres are: • Rubbers including natural rubber, SBR (styrene butadiene rubber) and PBR (poly-butadiene rubber) • Reinforcing materials such as steel cord and synthetic textiles including nylon and polyester • Fillers such as carbon black and silica • Process oils and other additives These raw materials are processed into tyres via a number of steps, including the formation of several semi-finished parts. These include rubber compounds, steel cord reinforced fabrics and textile cord reinforced fabrics. In some cases, there will be vertical integration with the rubber compounds and other semi-finished parts will be made in the tyre assembly plant. In other cases however, some tyre producers maintain specialist plants that focus on the production of compounds and fabrics. The movement of semi-finished parts from these specialist plants to the tyre assembly plants is a critical part of the pan-European logistics of the tyre industry.
The aim of this study is to look in more detail at a specific niche of the chemical industry, with its own unique supply chain dynamics - namely the tyre industry. The study will consider whether this industry, with its unique dynamics, will be affected differently from other important chemical end-markets.
Key Issues Addressed
Author: Brian Balmer
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