Rubber Product Manufacturers

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 1,300 rubber product manufacturers in the US process natural, synthetic and reclaimed rubber materials into a wide range of rubber products. Products include tires and inner tubes, hoses and belts, fuel bladders, rubber bands and erasers, balloons, haircare products, pacifiers and baby bottle components, floor and car mats, inflatable mattresses and pools, latex foam rubber, roofing membranes, sheathing, and rubber components for machinery.

Regulation and Safety

The industry is highly regulated due to the chemical mixtures and processes used to manufacture rubber products.

Varying Raw Material Costs

Manufacturers face significant fluctuations in the price of synthetic rubber from year to year.

Industry size & Structure

A typical tire manufacturer employs about 604 workers and generates about $250 million annually. A typical tire retreading manufacturer employs 23 workers and generates $6 million annually. A typical hose and belt manufacturer employs 101 workers and generates $28 million annually. A typical manufacturer of mechanical rubber products employs 93 workers and generates $23 million annually.

    • The rubber products manufacturing industry consists of 1,300 companies that employ 133,900 workers, and generates $45 billion annually.
    • Primary customers include automotive (manufacturers, suppliers, and repair shops), machinery and appliance manufacturers and repair services, aerospace (manufacturers and suppliers), industrial supply distributors, building materials suppliers, and consumer retail.
    • The tire manufacturing segment is highly concentrated with the eight largest firms representing 85% of revenue. For the rest of the industry, the top eight firms in each segment represent 30-52% of their segment’s revenue.
    • Large companies include Michelin, Goodyear, Bridgestone, Protolabs, Inc., CTI Industries, Ames Rubber Manufacturing, Warco Biltrite, Passaic Rubber, and Jefferson Rubber Works.
                                  Industry Forecast
                                  Rubber Product Manufacturers Industry Growth

                                  Coronavirus Update

                                  Nov 15, 2021 - Vaccination Mandate Triggers Multiple Lawsuits
                                  • More than two dozen Republican states and several businesses, industry groups, and religious organizations have sued to block the to block the Biden administration’s coronavirus vaccine mandate for private employers. Most of the plaintiffs call the mandate an act of government overreach. The mandate, which goes into effect on January 4, 2022, requires workers at US companies with at least 100 employees to be vaccinated against COVID-19 or be tested weekly. The Biden administration asserts it has the authority to act amid an emergency to protect workers from "grave danger" on the job. Many business owners say that employee resignations may increase if the mandate becomes effective.
                                  • About 83% of North American manufacturers who responded to a June survey by industrial sourcing platform and marketing firm Thomas are likely or extremely likely to re-shore, up from 54% in March 2020. “We are witnessing the wholesale reexamination of supply chain relationships, which will realign global manufacturing for decades to come,” said Tony Uphoff, Thomas president & CEO. Rubber product manufacturers are likely to benefit from an increase in domestic manufacturing.
                                  • While the procurement professionals surveyed by Thomas did identify challenges to sourcing materials locally, including barriers of price (40% of respondents) and speed (23% of respondents), the overwhelming majority of respondents still planned to re-shore operations.
                                  • Rubber product manufacturers may be negatively impacted by the pandemic-related semiconductor chip shortage that has forced auto production cuts. Automaker General Motors expects a production cut of about 200,000 vehicles in North America during the second half of 2021. That's double the 100,000 units that was expected when GM reported second-quarter earnings in August. Company officials cite the ongoing semiconductor shortage as the primary cause of production cuts.
                                  • Tire manufacturer Bridgestone is developing natural rubber from a woody shrub called guayule (pronounced “why-YULE-ee”) that grows in the US. Development began in 2012 but is accelerating due to a natural rubber shortage intensified by the coronavirus pandemic. The company expects guayule rubber to eventually account for about 20% of the rubber it uses in North America. A production facility is expected to open within 10 years.
                                  • A St. Louis, MO, company that is hoping to reduce reliance on natural rubber imported from Asia is using gene editing technology to increase the sunflower’s natural rubber production. Industry experts say that the coronavirus pandemic exposed the fragility of the natural rubber supply chain: Workers responsible for collecting the rubber couldn't cross borders to reach plantations, letting trees are go untapped. Factories that process rubber into usable products stopped operations for several months during the spring of 2020, leading to shortages when firms that use natural rubber products reopened. Edison Agrosciences expects to develop a sunflower variety that produces 3% natural rubber, an amount that will make it economically feasible to use the plant to create rubber products.
                                  • Vehicle miles traveled (VMT), an indicator of demand for tires, decreased 2% month over month in August and 12.2% year over year during the first eight months of 2021, according to the Federal Highway Administration. VMT was down 13.2% year over year for all of 2020.
                                  • Several industry analysts expect new auto sales to increase about 6.9% in 2021. The National Automobile Dealers Association expects 2021 sales of 15.5 million. Forecasters at car-shopping web site Edmunds also predicted 2021 sales of 15.5 million. Charlie Chesbrough, senior economist for Cox Automotive, said that Cox expects 2021 sales of 15.7 million. US auto sales in 2020 were 14.5 million, down 15% from 2019. It was the fourth-largest annual decline since at least 1980.
                                  • Total construction spending decreased 0.5% in value month over month on an adjusted basis but increased 7.9% in value year over year on an unadjusted basis in September, according to the US Census Bureau. Residential construction spending decreased 0.4% month over month but increased 19.2% year over year in September. Nonresidential construction spending decreased 0.6% month over month and 1.2% year over year in September.
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