Dunlop Aircraft Tyres Reveal Expansion Strategy

In the year following a successful centenary in which the company saw strong development of its Asian business, investment in machinery and technical expertise as well as a visit from HRH the Duke of York, Dunlop Aircraft Tyres has revealed the cornerstones of its strategy for continuing to develop its business in the aircraft tyre segment, including its successful aircraft tyre retreading business.

According to Chairman Ian Edmondson, Dunlop's strategy, driven by the company's private equity-backed ownership, which assumed control four years ago, is focused on both geographical expansion and expansion of the product range, particularly on expansion into Asia and utilisation of the company's recently opened joint venture unit in China, as well as focusing on developments within the market for radial aircraft tyres.

The aircraft tyre market is a global market dominated by Bridgestone, Michelin and Goodyear. Dunlop Aircraft Tyres is the fourth player in this market and focuses on key sectors within that market. The company has some strength in the military sector driven by the UK military but some 80 per cent of Dunlop's business is in the civil aircraft sector.

Geographically, the company is strongest in Europe followed by the Americas and then Asia. In terms of product the key strength is in regional aircraft, in particular single aisle, narrow bodied jets. A key selling point for the company is that they only manufacture aircraft tyres so their service is totally dedicated to that sector. There is no competition for resources from other parts of the business allowing them to provide a more personal and more responsive service.

In terms of geography the Dunlop Aircraft Tyres has a heavy European focus but Edmondson points out that there are significant opportunities in other markets within the world. The company currently manufactures both new tyres and retreads at its facility on the Fort Dunlop site in Birmingham. As Edmondson points out, new tyres can easily be sold globally from the UK but aircraft tyres are routinely retreaded. To service airlines with retreads on a global basis requires local service, hence the need for regional retreading facilities to enable them to unlock new sales. At the moment the company uses a third party retreader in North America. However, in Asia, currently the company's biggest growth market, Dunlop operates a joint venture company, located in China, with HAECO (Hong Kong Aircraft Engineering Company) and TAECO (Taikoo (Xiamen) Aircraft Engineering Company). The joint venture, Dunlop Taikoo (Jinjiang) Aircraft Tyre Company Limited, officially opened at the end of 2009.

Says Edmondson; "We are not yet ready to enter the USA with our own facility but it remains part of our strategy and when we are ready we will go into North America too".

In terms of product the focus is on the application of radial technology, which has been slow to develop in the aircraft tyre sector, bias still making up 80 per cent of the market. There are several reasons why this has been the case, not least the fact that bias tyres can be retreaded more and have a better fatigue life. However, weight saving has become important and radials can mean a 50 kg saving on a regional plane. New radials tend to be more expensive than bias tyres but typically offer 10-20 per cent more landings.

The strategy of focusing on the development and expansion of radial technology means that this will take Dunlop more into the larger aircraft sector so the expectation is that the company's mix will slowly develop beyond the servicing of narrow bodied jets more into the wide bodied jet sector. With this in mind, last year the company acquired machines and designs from Yokohama, which are now installed in the Birmingham facility and which will the company expand into wide bodied jet sector.

In addition to the above, an important aspect of Dunlop's strategy has been the recruitment of key sales and technical people to help their expansion drive. An example is the recent appointment of Marcus Hancock (previously with Cooper Tire) as Technical Director. Ian Edmondson explains; "Unlike cars and trucks each aircraft has a different tyre size so volumes in aircraft tyre production are much smaller and consequently investment costs are higher. Everything is bespoke so people are much more significant in manufacturing. The same is true within the factory. Aircraft tyres have historically been hand built and, although some tyres have moved to semi-automatic production, people skills continue to be vital".

A further focus is in the area of tyre monitoring systems, allowing aircraft tyres to be given a Tyre ID to enable landings to be counted and loading and pressure information to be analysed. "Ultimately", says Edmondson, "we are looking at putting chips into tyres". Dunlop Aircraft Tyres currently manufactures 80,000 new tyres and 25-30,000 retreads per year.

(Issue 2011/2)