Rubber certainly has its role to play in forest landscapes across the world, with natural rubber plantations having risen as a substantial basis of deforestation. One element that addresses deforestation concerns is the correct certification of rubber – be it natural or synthetic. International Sustainability & Carbon Certification (ISCC), a globally leading certification system, works with the objective of providing sustainability solutions for fully traceable and deforestation-free supply chains, inter alia involving the rubber industry. ISCC was one of the presenters at the Tire Technology Expo 2022 at Hannover, Germany, and Dr Jan M Henke, Director, ISCC, threw light on the nitty-gritty of certifications in the rubber industry, their clients in the tyre and rubber industry and more, in an interaction with Tyre Trends.

Can you tell us about your global sustainability scheme?
Our global sustainability and carbon certification scheme has certified companies in more than 100 countries. We certify entire supply chains from farms to plantations and forestry, and also the point of origin of waste and residues, biogenic and fossil waste. This is also covering rubber and natural rubber. Moreover, we cover biogenic waste and residues, including fossil waste, like carbon black, which is, again, used in the rubber industry. We also certify pyrolysis, where recycled mixed plastic waste can help produce synthetic rubber out of the pyrolysis oil. And we certify the entire supply chain, sustainability of raw material.

What is Meo’s role?
Meo initiated ISCC in a multi-stakeholder process a long time ago. It once was a Meo project and went on to become an operations and certification scheme. It was even recognised by the European Commission and some other authorities. It later got segregated from Meo, and ISCC is governed by the ISCC Association with more than 200 members.

So, what role does Meo play in this in case of certification?
Certification is always by independent, third-party certification bodies. ISCC is the standard development. Today’s ISCC was once a project of Meo. It then went on to become independent and operational, and was no longer a project but an individual entity running and further developing and improving the certification scheme.

The operations of the certification system, database, registration, qualification, training programme, integrity programme, the website and all the day-to-day business is done by ISCC. We are currently incorporating 45 certification bodies that are actually doing the on-site audits based on the ISCC standard.

Is ISCC recognised by the European Union?
Yes, it is being used in many sectors, like in bio energy, bio fuel, renewable transport fuels etc. In fact, ISCC is also recognised by the European Commission and by companies based on their sustainability standards and different industry initiatives.

Hence, ISCC is active on a really broad scale, covering different types of raw materials, natural rubber being one of them. We are also covering waste and residues for pyrolysis and their outputs. We then go to all the different end markets, which can be polymers, rubber, tyres, packaging, all types of plastic products, bio energy or any type of renewable fuels, aviation fuels, maritime fuels etc. This is global and is being used in more than 100 countries.

Tyre companies are talking about sustainability, but the larger part of the industry is of small stakeholders, especially in the natural rubber segment, where traceability and accountability are the main issues. How do you see this?
That’s a big challenge, especially in rubber production. At the cultivation level, there are a lot of small holders. There also exist large plantations that are easier to implement and certify. However, it’s definitely a bigger challenge with the small holders; it always depends on how well they are organised, whether there are certain structures, cooperatives or some central units.

Can you tell us about the certification of natural rubber?
The certification of natural rubber is definitely possible. Palm oil is maybe another example where the setup is quite similar sometimes. Also, with respect to the small holders, sometimes the companies are the same. Furthermore, we are very active in the palm oil sector with ISCC. We now also see a demand for natural rubber sustainability certification.

Is there a different process for getting certified in the rubber industry or is it a standard process?
It’s a standard process. It works on plantation. In fact, it works more or less the same as for palm plantations. But you certainly need to make sure that all the small holders reach a certain level, which is difficult. So starting out, bigger plantations may be easier because it’s easier for them to properly prepare for the certification audits. And then, you need to involve more farmers, step by step.

Who decides the standard process to get the certifications?
ISCC develops the standards and the requirements in the multi-stakeholder process. It then comes down to a company saying that it wants to become certified, use ISCC and also make certain claims and communications to its customers and stakeholders. They then reach out to a certification body, that is cooperating with ISCC. Following this, the certification body will do the audit on site – the third-party auditor will also make a decision on the issuance of the certificate.

Can tyre manufacturers get different certifications? For instance, one for natural rubber and another one for synthetic rubber? Or do they get one for all?
If tyre manufacturers source raw material for manufacturing from natural rubber but also synthetic rubber and everything under ISCC, then it’s one audit. Then the auditor would look into aspects of the volume of natural rubber being used that has been certified, although upstream. If one buys from certified suppliers and if the same auditors check, then aspects like the share of the certified synthetic rubber being used, the share of carbon black, etc. are taken into account. And finally, everything can be put together and a certain claim can be made.

Can tyre companies get a separate certificate for natural rubber?
Yes, they can. They can have separate certificates for natural and synthetic rubber both, or even of everything together. As for the final tyre, let’s say, if it’s 20 percent natural rubber and 20 percent synthetic rubber (40 percent of the tyre), then they can make certain sustainability claims on use of sustainable, circular materials etc.

What is the value of a certification?
It’s no deforestation – that’s key when it comes to natural rubber. When you certify, ‘no deforestation’ is the core requirement and deforestation is not allowed under ISCC. It is about additional environmental and social human rights criteria. This fits fine in this part of ISCC’s sustainability standard. And then it’s certainly about traceability in the supply chain, all the way in the end to the final tyre. And if this is established, then you can certainly make claims about the rubber or the final tyre, saying that it has been sustainably produced, based on sustainably sourced raw materials etc.

Plus, if you do this in a smart way, then you can actually cover the natural and synthetic rubber. Natural rubber and synthetic rubber are both very important parts of the final tyre. Both can be covered under ISCC.

Deforestation is a big issue, mainly in Southeast Asian and African countries. How difficult is it to keep an eye on that?
It’s not always easy to handle. Deforestation is not allowed under ISCC; there is a cut-off date of January 2008. If there was deforestation after January 2008, one cannot become certified. However, replanting or a change from palm to rubber is not considered as deforestation.

For example, if you have a palm plantation and if you cut it and plant rubber after 25 years, then that’s not deforestation. That’s just normal replanting.

Also, ISCC is certainly doing assessments, supported by remote sensing. Our core principle is no deforestation, which is very important to ISCC and its stakeholders. ISCC is not just us doing the operations in Cologne; there’s the ISCC Association for the multi-stakeholder dialogue. It has over 200 members from entire supply chains, industries, plantation companies, mineral oil, chemical companies, converters etc. We also have research organisations from different regions involved. In fact, also a number of non-governmental organisations are members of the ISCC Association.

The association meets annually and makes important strategic decisions and elects the ISCC Board. Due to the representation of the research sector and non-governmental organisations, there is quite a good balance of what people want and further development.

Can you tell us about the commercial benefits involved in having a certification?
There is a big value in it. It reduces sustainability risks for companies, helps to establish monitoring, protects the license to operate and has commercial value. For example, the OEMs ask for more sustainable products or lower greenhouse gas emissions. They all have climate neutrality commitments in place and need to start delivering step-by-step now; they need to show what are the activities that they are engaged in and how those improve sustainability in the overall supply chain. Here, ISCC certification can be used.

How do you maintain transparency in certification as a third party?
There is an annual audit. The certificate is valid for one year and then there is a re-certification. The company needs to provide evidence in every re-certification that the rules are being followed. And if they are not, a renewal of the certificates is not possible.

We certainly have quality management and training for companies and the auditors as well, who conduct on-site audits. What’s more, we have our own integrity programmes, where we send out our own auditors. These auditors work for ISCC and double-check the performance of the companies and the work of third-party auditors. Therefore, this integrity programme is key. We have the website where all the certificates are being published and the entire standard is public.

Do you help companies improve their sustainability supply chain?
No, we don’t consult. At ISCC, we are not involved in supporting the companies in order to improve. We have the standard and we conduct the training for companies. The preparation for the audit is not where ISCC is involved; it’s independent from that type of work. And the certification bodies are not allowed to consult in parallel either. ISCC is the independent standard that is used to certify that companies fulfil the sustainability requirements.

What are the other segments that you cover in the tyre industry?
It’s the entire supply chain. Petrochemical industries, tyre manufacturers etc. can all be covered. This also includes everything from plantations to the end product in the tyre industry.

Which is the easiest and the toughest one to certify?
All elements of the supply chain need to be covered.

This can sometimes be a challenge in the beginning, so as to convince your suppliers and also get certified. But, in truth, we have more than 6,000 certificates under ISCC. So there are already a lot of players that have valid certificates, and now this is starting to move into the space of rubber and tyre manufacturers.

Can you tell us about your clients in the rubber and tyre industry?
We have requests from many tyre producers right now. Some producers are certified already. Plus, we have requests for carbon black and first requests for natural rubber. We see the number of requests increasing, and we do have first certificates and first registrations from tyre producers. So we expect this to rise further as the industry needs to show compliance with their sustainability and climate neutrality commitments.

We see the entire tyre industry now targeting sustainability. So how do you find more opportunities and what’s your plan to get more client support?
ISCC started to get really further engaged in the rubber and tyre industry about a year ago; the industry has started understanding the standards, participating in ISCC trainings, joining our stakeholder events etc. Therefore, step by step, they got to know ISCC better and what it could do for them. They have now even started to get involved and do certifications, including reaching out all the way to the cultivation of natural rubber.

Are you going to focus on the Asian market?
Yes. In fact, we already have a few hundred certificates in Malaysia, Indonesia and other countries in the region. These markets are truly important. Our other key markets are North America and Europe, while we are also active in Africa and South America.

We are, eventually, trying to do more and convince people to become certified, show compliance to sustainability requirements, engage in a continuous improvement approach to become more sustainable and then allow manufacturers to really make claims.  

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Apollo Tyres is preparing to introduce the Vredestein Quatrac Pro 2, a next-generation ultra-high-performance all-season tyre slated for release in the summer of 2026. This product is engineered with a completely new architecture, innovative materials and an advanced directional tread to achieve leading performance standards. It is specifically designed for compatibility with contemporary electric and hybrid vehicles, offering low rolling resistance and minimal noise alongside a reinforced structure to accommodate their greater weight without compromising dynamic response.

This breakthrough tyre is conceived as a versatile, performance-focused option suitable for a broad range of vehicles, including sports cars, high-performance saloons and SUVs, and will be available in a wide selection of sizes. The launch continues the Vredestein brand's longstanding leadership in the all-season category, a segment it has helped define since the 1990s and where it currently offers the most comprehensive product range.

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CEAT Ltd reported strong growth in the December quarter, supported by higher volumes, improving operating margins and continued investment in capacity expansion, while flagging near-term pressure from currency movement and raw material costs.

The tyre maker posted consolidated revenue of INR 41.57 billion for the third quarter of FY26, up about 26 percent year on year. Standalone revenue rose 20.1 percent to INR 39.57 billion, driven by growth across replacement, OEM and international markets.

“This was a good Q3 for us, with more than 20 per cent year-on-year growth on a standalone basis,” said Arnab Banerjee, Managing Director and Chief Executive Officer. “Volume momentum continued across segments, supported by GST rationalisation, improving consumer sentiment and steady recovery in OEM demand.”

Demand outlook remains supportive

Management said the Indian tyre market entered calendar 2025 on a stronger footing, aided by tax reforms, rising electric vehicle adoption and premiumisation. CEAT expects the industry to deliver healthy single-digit growth over the medium term.

“Increasing disposable income in rural markets following robust rabi sowing and kharif harvest completion has been supportive,” Banerjee said, adding that replacement demand for truck and bus radials is expected to remain in the mid-to-high single digits, with seasonal upside during the summer months.

Two-wheeler tyres continued to perform strongly, while OEM demand for medium and light commercial vehicles recovered following GST rationalisation. Passenger vehicle demand is expected to grow at double-digit rates in the near term, supported by easing financing conditions.

International demand for radial commercial vehicle and passenger car tyres remained firm, with India emerging as a credible sourcing base for global OEMs and distributors.

Margins improve despite cost headwinds

Standalone EBITDA rose to INR 5.56 billion, translating into a margin of 14.1 per cent. Consolidated EBITDA stood at INR 5.68 billion, with margins improving both sequentially and year on year.

Gross margins, however, contracted sequentially by about 109 basis points, largely due to currency depreciation and inventory adjustments.

“The depreciation of the rupee and a modest rise in international natural rubber prices could result in a 1 to 1.5 per cent cost headwind over the next few quarters,” said Kumar Subbiah, Chief Financial Officer. “While crude-linked inputs remain stable, currency remains the key variable to watch.”

Standalone profit after tax came in at INR 1.92 billion, compared with INR 2.02 billion in the previous quarter. The decline reflected a one-time provision of INR 578 million linked to new labour code implementation.

“This provision largely relates to past service costs,” Subbiah said. “The ongoing quarterly impact going forward is expected to be minimal.”

Camso integration on track

CEAT said the integration of its Camso off-highway tyre business is progressing broadly as planned. Quarterly revenue stood at about USD 20 million, reflecting the ongoing transition of customer relationships from Michelin to CEAT.

“Most existing customers have approved the business transfer, ensuring continuity,” Banerjee said. “There are some one-time transition and IT costs in Q3, which will not recur from Q4 onwards.”

Management said underlying operating margins at Camso are already in double digits and are expected to improve further as utilisation rises and CEAT gains greater control over sourcing and sales.

Capex remains elevated

Capital expenditure during the quarter stood at INR 2.54 billion, taking cumulative spend for the year to INR 6.73 billion, excluding acquisition-related intangibles.

The board approved an additional INR 13.14 billion investment at the Chennai plant to add 3.5 million passenger car tyres of annual capacity, with completion targeted for the second half of FY28. The project will be funded through a mix of internal accruals and debt.

“Our capex guidance remains broadly in line with earlier estimates,” Subbiah said. “We will continue to monitor leverage closely to ensure balance sheet strength.”

Standalone gross debt stood at INR 29.54 billion, with debt-to-EBITDA improving to 1.25 times.

EV, premiumisation and sustainability

CEAT maintained a strong position in electric vehicle tyres, with more than 30 per cent share in OEM passenger EV tyres and about 20 per cent in two-wheeler EVs. The company continues to invest in premium products, including larger rim-size, run-flat and ZR-rated tyres, to improve realisations.

On sustainability, CEAT announced a partnership with CleanMax to develop 59 MW of hybrid wind-solar capacity, targeting about 60 per cent renewable energy usage by FY27.

“Q3 closed on a strong note, supported by a robust product pipeline and improving customer confidence,” Banerjee said. “We remain focused on sustaining growth while maintaining margin discipline and investing for the long term.”

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Himadri Speciality Chemical Ltd reported a sharp rise in profit for the quarter and nine months ended 31 December 2025, supported by margin expansion and accelerating investment across speciality carbon black capacity, export infrastructure and downstream materials.

The Kolkata-based speciality chemicals group said profit after tax for the nine months rose to INR 5.6 billion, exceeding the full-year profit recorded in FY25. Earnings before interest, tax, depreciation and amortisation increased to INR 7.3 billion, reflecting stronger operating leverage and a shift towards higher value-added products, despite softer revenue.

Revenue for the nine-month period stood at INR 33 billion, while total sales volumes increased by about three percent year on year to 428,572 tonnes. The company said its product mix remained focused on speciality and application-specific offerings, supporting profitability amid market volatility.

For the December quarter, consolidated EBITDA rose about 12 percent year on year to INR 2.5 billion, while profit after tax increased 36 percent to INR 1.9 billion, underlining continued margin improvement.

Investment-led expansion remains central to Himadri’s growth strategy. During the quarter, the company commenced trial production at its brownfield speciality carbon black expansion project at Mahistikry. Once fully operational, the project will increase total speciality carbon black capacity to 130,000 tonnes per annum, positioning Mahistikry as the world’s largest single-site facility for speciality carbon black. The project involves an estimated capital expenditure of INR 2.2 billion and is aimed at premium applications including plastics, inks, coatings and other niche segments.

Himadri also commissioned a high-temperature liquid coal tar pitch terminal at New Mangalore Port, creating a second export corridor alongside Haldia on India’s eastern coast. During the quarter, the company executed its first export shipment of 3,600 tonnes of liquid pitch to the Middle East. Management said the new terminal enhances logistics flexibility, reduces concentration risk and supports export-led growth in coal tar derivatives.

Beyond core expansions, the company continues to deploy capital across multiple growth platforms funded largely through internal accruals. These include forward integration into speciality chemicals such as anthraquinone and carbazole, with planned capital expenditure of INR 1.2 billion, as well as phased investments in lithium-ion battery materials, including a lithium iron phosphate cathode active material plant targeted for commissioning from FY27.

During the quarter ended 31 December 2025, upon receipt of INR 2.4 billion in balance consideration from promoters, Himadri allotted one crore equity shares to the promoters. Following the allotment, promoter shareholding increased to 52.5 per cent.

Commenting on the performance, Anurag Choudhary, Chairman and Managing Director, said the results reflected disciplined execution, operational efficiency and steady progress on strategic investments. He said the commissioning of new capacities marks the beginning of the company’s next phase of growth.

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In a major step to advance its global manufacturing footprint, China’s Triangle Tyre has unveiled plans for a new facility in Cambodia. The company will invest CNY 3,219 billion (approximately USD 462 million) to construct a tyre plant in Svay Rieng Province, with construction slated to commence in March 2026. This project represents a cornerstone of the firm’s international expansion strategy and a deepening engagement with the Belt and Road Initiative.

The future facility is designed to produce six million high-performance passenger car tyres and one million commercial vehicle tyres annually. It will employ proprietary manufacturing technologies developed by Triangle Tyre. Output from the Cambodian plant is primarily destined for key international markets, including North America, Europe, the Middle East, Africa and Southeast Asia.

Establishing a local, wholly-owned subsidiary will facilitate the project's implementation and ongoing operations. Company officials position the investment as a strategic move to optimize global supply chain and sales networks while enhancing overall market competitiveness. Financial projections indicate the project is expected to generate average annual revenues of approximately CNY 2,585 billion (approximately USD 371 million) upon reaching full production, with an estimated investment return rate of 15.1 percent.

This overseas capacity expansion is viewed as a direct response to China’s ‘Go Global’ policy. It aims to secure new market opportunities and sustainable profit growth, thereby strengthening the company’s position for long-term development in the global tyre industry.

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