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NEWS MARKETPLACE

JIM SMITH, EDITOR | jsmith@babcox.com

HIGHLY FOCUSED
Double Coin Making Progress in Goal to Reach Second Tier
“We are trying to shorten the gap improve every step of the way. pany into a market-first global player
between us and our competition globally. “We don’t want to be thought of as a cannot be accomplished overnight.
Having a good brand means having good Chinese tiremaker,” said Mike Yang, Not that many years ago, Double Coin
quality, good service and reasonable price. president of CMA LLC. “We want to be had maybe 35 SKUs and pumped out
We are working on all aspects to improve thought of as a tire manufacturer that millions of tires with no regard for
ourselves. We are not the best right now happens to make tires in China.” where they were to be sold. Today,
but we are doing our best to improve.” To get a better sense of Yang’s state- Double Coin produces nearly 500 SKUs,
– Fan Xian, Chairman, Double Coin ment, TIRE REVIEW visited CMA and a selection tempered to meet the specif-
Holdings Double Coin facilities in California and ic needs of the 88 countries to which it
China, met with management and staff, exports, Yang said. That transformation

T
he slogan for the company’s plant and toured its two primary tire plants, did not come without a lot of work.
on the outskirts of Shang-
hai is at once simple and
highly complex:
“Make Progress Every Day.”
While exhorting the factory
workers to give their best effort,
those four words have become a
cultural mantra for a company
looking to break out.
Double Coin Holdings Ltd. –
once known as Shanghai Tyre &
Rubber Co. – knows its place in
the world tire market, knows
where it wants to be, and knows
it has a lot of work to do to
reach that goal. And it has more
than 5,000 people all pulling in
one direction – up.
To dismiss Double Coin as
just another Chinese tire com-
pany (definition: cheap, low Double Coin Holding’s modern truck tire plant in Rugao.
tech products) would be a mis-
take. Bridgestone, Toyo, Michelin, Han- both producing radial medium truck Long History
kook and Kumho – all started with out- and OTR tires. Double Coin Holdings can trace its
post sales offices on these shores, sup- Based at CMA’s headquarters in Mon- origins back to the 1920s when its for-
ported by eager engineering and pro- rovia, Calif., Yang is clearly the bridge bearers first produced rubber shoes. It
duction teams in their home country – between Double Coin and North Am- wasn’t until 1934 that the Great China
were major players in North America erica, and between where Double Coin Tyre Co., as it was known then, pro-
within a handful of years. is and where it wants to be. And where duced its first car tire, and it would be
Double Coin appears to be well on its it wants to be is a solid Tier 2 global tire another 50 years before it made its first
way. CMA, its U.S. arm, has grown from company. radial car tire.
sales of $40 million in 2004 to revenues Aiming for Tier 2 may seem like a low At the urging of the government, the
of some $200 million in 2007, and is target, especially for a tiremaker riding assets of Great China Tyre and another
spending a lot of energy on building a the rapid industrialization of a massive producer were combined in 1990, creat-
brand, relationships and a reputation on country. But Double Coin’s sense of self ing Shanghai Tyre & Rubber Co. The
these shores all while improving prod- prevents it from being overly ambitious. following year, the company built its
uct quality, and continuing to learn and And converting a production-first com- first radial truck and OTR tire plant near

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Upgrades were made to its first radial ing, our tires are pricy. We’re not the
truck tire plant, and in 2005 Shanghai cheapest in the market. We are the high-
Tyre opened a modern sister plant in est-priced radial truck tire coming from
Rugao, about a two-hour car ride from China,” said CMA vice president Aaron
Shanghai. Murphy. “But we also have the best qual-
Trading on its well-known brand, ity, the most number of SKUs, the big-
Shanghai Tyre changed its name to gest product range, the OE contracts, a
Double Coin Holdings in 2007. Today great warranty program, marketing pro-
the company produces Double Coin and grams and all the support services our
Warrior branded truck, OTR and indus- customers love.”
trial tires. And while it still owns the And customers are showing the love.
rights to the Warrior name for passenger Double Coin radial truck tires held a
tires, the joint venture plant has discon- 1.10% share of the U.S. medium truck
tinued making Warrior or Wynstar tires, tire market in 2006, according to TIRE
Double Coin said. REVIEW estimates, a figure posted before
Passenger tires are back on the hori- high fuel prices and a tightened econo-
zon, though. Opening next year is an all- my put the squeeze on truck fleets,
new passenger and truck tire plant in pushing them to look for less expensive
Chungqing, a burgeoning city of nearly alternatives.
17 million that has become an auto pro- Last year, Double Coin registered in
duction center. The Warrior brand will the medium truck tire category of TIRE
Well-known in China, Double Coin’s mas-
cot suggests prosperity and luck. figure prominently in that plant’s future. REVIEW’S Tire Brands Study (September
2007) for the first time – a sign that its
Shanghai. In 1992, the company built a North American Growth distribution and sales are reaching broad
radial passenger tire plant, producing its When those passenger tires come, it’s status. Despite finishing toward the bot-
Warrior brand tires for domestic and a good bet that CMA will be looking to tom with an overall score of 7.3 against
export, right next door. broaden its North American horizons. an average score of 7.7, Double Coin
And produce it did. Countless mil- For now, CMA is as singularly focused and CMA officials see that as a positive –
lions of tires with no market in mind. To on the truck and OTR markets as its par- and a clear set of goals to attain.
rein things in, the Chinese government, ent company. Two things CMA and Double Coin
which remains majority owner of the Over the past three
company, brought in Fan Xian as chair- years, CMA has embarked
man in 2000. Fan, armed with an educa- on a steady brand image
tion in engineering, marketing and eco- and awareness effort, cou-
nomics, applied some deft Western-style pled with developing pro-
management to bring order to a bloated, ducts and support pro-
inefficient company. grams to enhance its mar-
In 2002, Groupe Michelin and Shang- ket position. The payoff
hai Tyre agreed to a joint venture, with has been solid. In January
Michelin assuming a 70% share and 2007 CMA signed an OE
100% control in the passenger tire plant, supply deal with Navistar,
renaming it Michelin Shanghai Warrior putting Double Coin tires
Tyre Co. Refocused entirely on truck on International and IC
and OTR tires, Shanghai Tyre then went platforms. Last October it
public, with a minority stake traded on opened its first U.S. ware-
the Shanghai exchange. house, a 150,000-square-
At the same time, Fan slashed foot facility in Memphis.
Shanghai Tyre’s employment, taking it Just last month, CMA an-
from a company with almost 18,000 nounced that Double Coin
employees down to around 3,700 em- radials will be available
ployees. Today, thanks to business growth through Love’s truckstop
and with its Rugao plant on-stream, locations. Double Coin House locations across China provide a vari-
employment is back up to around 6,000. “Comparatively speak- ety of truck tire services.

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don’t expend energy discussing are their It is Fan’s job to keep Double Coin on and we are working hard to improve on
relationship with joint venture partner its path, and his words have echoed those.
Michelin and CMA’s 2003 internal di- throughout the organization. And while “We are trying to shorten the gap be-
vorce, both of which, ironically, have he was chosen by the Chinese govern- tween us and our competition globally.
worked to the company’s favor. ment – which holds a 60% share in Having a good brand means having
Because it has no say-so in the opera- Double Coin – to run the company, Fan good quality, good service and reason-
tion of the plant, Double Coin has no is no patronage appointee. Already suc- able price. We are working on all aspects
comment to make regarding Michelin cessful in other businesses, Fan brought to improve ourselves. We are not the
Shanghai Warrior Tyre Co., other than his experience and expertise to turning best right now but we are doing our best
to remind that it still owns the Warrior around a key component of what the to improve.”
brand name. government states is a vital industry for That improvement also means ex-
CMA, at the same time, benefited the country’s economic future. pansion. “We are looking for investment
greatly from its split with what is funds to help us grow and expand.
now American Pacific Indust- We need to have experienced peo-
ries. API remains active and suc- ple to join our family and help us
cessful with the multi-branded grow in those export markets,” he
programs it manages through a said. “That will help us speed dev-
series of tire plants in China, elopment of our company.”
India and other parts of the The future may well rest outside
world. CMA, on the other hand, of China, Fan suggested. “The
was able to devote 100% focus to labor cost in Shanghai is high. We
building the Double Coin name are looking to move production to
and product line. lower cost cities in China,” and
Thanks to its growth in North may look for expansion opportu-
America, Double Coin Holdings nities in the Asia-Pacific region,
is now China’s second largest eastern Europe or Africa, “where
tiremaker and says it is the 19th we can be close to raw materials
largest in the world, with 2007 sources.”
revenues of nearly $1 billion. Double Coin is actively recruit-
In 2006, Double Coin pro- ing “experts in technology and
duced some 3.5 million radial management” to help it grow busi-
medium truck tires, 50,000 radi- ness in Europe, the U.S. and the
al OTR tires (up to 25 inches), Middle East, he noted, and the
and 1.6 million bias truck and Fan Xian, Double Coin Holdings chairman, has ambition. company has close relationships
bus tires. For 2007, radial truck with top universities to help devel-
tire production hit 3.8 million, while After all, economic growth will take op technology and management. Doub-
radial OTR production doubled with the modern transportation – and that means le Coin employees, in fact, enjoy expan-
introduction of 35-inch sizes. Come radial tires, lots of them. sive access to advanced training, part of
2009, the new Chongqing plant will add “In 10 years time, our tire sales will be Fan’s plan to grow from inside and out.
another 1.5 million units to its capacity. in the top 10 in the world,” said Fan, The company also operates the Tyre
As a company, Double Coin Holdings “and we will have the largest TBR capac- Research Institute, a separate company
holds a 25% share of China’s replace- ity in the world – maybe 20 million tires that is essentially Double Coin’s R&D
ment truck tire market, and fully 75% of per year – and be the number one ex- center. Opened in 1993 on the grounds
its radial OE truck tire segment. porter.” Though he does not speak of of Double Coin’s Shanghai plant, the
passenger tires specifically, one can Institute’s 200-person staff works on
Steadying Force sense that attacking that segment is on new products and product testing.
Like many of his western colleagues, the dial. The Institute is also home to the only
Fan is rather frenetic, constantly on the Fan is also a TIRE REVIEW reader, and OTR test equipment and only radial
go, constantly needed, and constantly studies the data and statistics provided truck tire noise testing system in China.
juggling many balls. Still, despite the in our annual Sourcebook issue. Plus, it works with Double Coin suppli-
demands and the position he holds, the “In your Tire Brands Study, we were ers to develop tire production equip-
affable executive talks and jokes easily very excited to be on it,” he said. “We ment to meet specific technical needs.
with his staff. see the areas where we need to improve

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Plants are Backbone – but management’s choice of manpow- company’s emphasis on global presence,
The large white rock outside the er vs. automation has not hurt product it has not been left in the dirt. Over time,
entrance to Double Coin’s Rugao plant quality; the plant sports all of the recog- Zhang Wan You, plant vice general man-
features Chinese characters that make a nized quality certifications, including ager, and his staff have made multi-mil-
simple statement: “Taking Flight.” As ISO9001. lion dollar upgrades to improve quality
Double Coin’s crown jewel, the three- With only time off to celebrate the and expand capacity.
year-old facility is expected to lift the Chinese New Year, the plant runs con- Today, Double Coin’s Shanghai plant
entire company to the next level. stantly seven days a week. The work- is the largest truck tire plant in the coun-
Yue Chun Chen is president and sen- force there is proud of their accomplish- try and China’s single largest exporter of
ior engineer of Double Coin’s Rugao ments, which are well-noted in the tires. Not bad for a plant that produced
plant, and the plant’s just 300,0000 units in its
designer and guiding first full year. Ten years
hand. It is he and his 2,000 later, the plant produced
employees that supply 1.06 million tires.
most of CMA’s OTR tire Today, it cranks out 2.9
needs and a growing por- million radial truck tires –
tion of its radial truck tire the maximum the plant
requirements. can possibly produce,
Located in Rugao Econ- Zhang said. With no land
omic Development Zone, available for expansion, the
near the Yellow River, the only thing Double Coin
plant has 566,950 square can do is maintain produc-
meters under roof, includ- tion levels.
ing offices and warehouse Because the Tyre
space, and there is enough Research Institute is locat-
available land there to ed there, all of the compa-
build a like-sized factory. ny’s new products are made
Land in Rugao is some at the Shanghai plant first,
20 to 30 times cheaper CMA president Mike Yang (left) and vice president Aaron Murphy (right) Zhang said. Once perfect-
with their direct Double Coin contact Dean Jin, vice manager of interna- ed, production can then be
than in Shanghai, he said,
tional trade. shifted to the Rugao plant
and while company offi-
cials won’t fully commit, Double Coin is plant’ s showroom area, and they carry – and, later, the Chongqing plant.
looking to push more of its truck tire the confidence of a company on the Of the plant’ s 1,860 employees, Zhang
production to Rugao and out of its older move. quite proudly points out that nearly 30%
sister plant in the city. While Rugao makes only radial tires, have a minimum of a tech school certifi-
Double Coin said it invested $250 it also produces some tube-type lines to cate or some level of college education.
million to $300 million in building and meet domestic market needs. China- “Our target from many years ago is to
equipping the Rugao plant, including made steel truck wheels are inconsistent try to differentiate ourselves from all of
modifying locally produced and import- and tend to leak air, said Yang, so Doub- the other brands, to be a premium
ed tire making equipment to meet its le Coin produces tube-type radials, and brand,” Zhang said. “We are working
needs. sells complete tire-tube-flap packages to from all aspects – manufacturing, tech-
For instance, Double Coin modified customers. nology, marketing, training – to move
an Italian-made calendar to double Last year, Rugao added production of Double Coin the next level.
capacity from one to two million tires 35-inch radial OTR products, most of “But we have to be practical and
per year. Curing presses, too, were mod- which ends up in the U.S. All OTR tires assess ourselves,” he reminds. “Maybe
ified, cutting 10 to 15 minutes from cure made there pass through a complete X- someday we can be a first-tier brand. But
times, effectively increasing the plant’s ray inspection. we are most focused on the first step – to
output. move to be among the best.” TR
For 2008, the Rugao plant was set to One Step at a Time
produce 2.4 million medium truck radi- Double Coin’s original truck tire plant
als and 100,000 radial OTR tires. in Shanghai stands in contrast to the
The plant itself looks like any in the newer facility in Rugao. But older does
For additional features and the latest tire
U.S. There is a certain level of automa- not mean less capable. industry news, visit www.tirereview.com.
tion – not as much as one might see here Though it opened in 1991, before the

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