According to a new study by Report Ocean, the rubber processing chemicals market size is expected to reach USD 7.97 billion by 2028. That’s very close to Finorchem’s vision of being in the lead in chemical supplies to the tyre industry by 2030. We talk to the rubber processing chemicals manufacturer about the Acmechem-Merchem merger, how India can be at the forefront of the tyre industry and how quality speaks for everything.

In spite of Covid, tyre companies have come up with a lot of investments; green field projects are taking place and expansion has been happening. For the next 10 years, tyre organisations are talking about the growth of the domestic industry, which was seven to eight percent earlier. Plus, we can’t forget about the export market and another industry along with the tyre sector – the automobile sector. Along with the rubber industry, rubber chemical consumption will also grow.

One such company that believes it is in the right place at the moment, with all that’s going on across the world and because of the pandemic and the Russia-Ukraine war, is Finorchem, a leading manufacturer of rubber processing chemicals in the APAC region. Speaking in this context, Kishor Katkar, Director – Sales & Technical Services, Finorchem, says, “The supply chain is disturbed, and with the Acmechem and Merchem merger, we now have a wide range of rubber chemicals. We are ready to support the rubber industry with sustainable quality products from the rubber plant.”

The Acmechem-Merchem merger
Further sharing information on the Acmechem and Merchem merger, Rishabh Holani, Director, Finorchem, asserts that Acmechem is originally into a lot of speciality rubber chemicals and Merchem was more into mainstream rubber chemicals. “So the merger was a perfect fit in the synergy for us as we were already in the chemical field with specialised products,” he points out and goes on, “But with the merger with Merchem and the new entity named Finorchem, we have also entered mainstream rubber chemicals, catering to a wider range of customers that are using these mainstream chemicals. Hence, this fits well within our portfolio which didn’t exist. So it has opened up a lot of opportunities for our company, in both India and the world.”

So, is it true that the future is of collaborations and mergers? We can’t help asking, to which Holani answers with a yes. He further explains, “That’s because a lot of consolidation is happening across the industries. So it was a good synergistic move for us to get involved in mergers.”

Why R&D is important
Finorchem is paying rapt attention to how it is flourishing in its R&D department. Dr Raj B Durairaj, Director of R&D, Finorchem, has been in the R&D of the chemical industry for at least 45 years and joined Finorchem about three months ago. “I have been involved with a lot of R&D activities in the last 45 years. So my products developed in the US and China are well known throughout the world,” Dr Durairaj tells us.

                       Rishabh Holani, Director, Finorchem
  

He further goes on to enlighten us that his concept is that any growth of a company depends on the strength of the R&D. “Hence, we want to put the infrastructure in such a way that our R&D can develop not only in the final product but from scratch,” he shares and continues, “We want to produce our own raw material so that we can develop the final product that is of high quality for our customers’ needs. If we do that, then we don’t need to depend on countries like China, or even Europe. With our knowledge in the chemical and rubber industry, we can develop advanced technologies. Right now, we are planning to develop advanced technologies in order to meet the challenges of the tyre industry, like rolling resistance, wet grip and dry grip. And those concepts are put in our developments.”

The company’s vision
It is just the beginning, definitely. Finorchem’s vision is that by 2030 it will be the dominant player in India, not only to supply raw materials for the Indian tyre industry but around the globe. So it is the right time where the company is putting its infrastructure in the manufacturing sector, R&D and the pilot plant facilities. With this, it plans on being at the forefront of chemical supplies to the tyre industry by 2030.

China’s impact on the tyre industry
Speaking of lands like China and Europe, China is still struggling with Covid and so is its tyre industry. China plays a huge role in the rubber chemical space; 70 percent of the supply comes from China, and it has impacted the whole industry because of the lockdowns that have taken place, Holani mentions. “However, we have made strategic moves in delinking ourselves from China and have strategically sourced our raw material partners and suppliers from different regions, whether it be India, the US, Europe or Japan,” he tells us.

Therefore, Finorchem was much more insulated from this entire tyre chaos that was taking place in China. This has helped the company in expanding its range while China was facing these difficult times.

However, the cost element needs to be taken into account. Today’s market situations are very volatile, and in some situations, China is much more expensive when even compared to countries like Europe or the US. Hence, the cost factor depends on situation to situation.

Shedding more light on this, Katkar elaborates, “We are talking about the China plus one policy, which even Japan is talking about. They have shifted their manufacturing base, so our tyre industry, as well as non-tyre industries, has really understood that over-dependence on China is going to fail miserably in the supply chain issue. With that, Finorchem is in the right position to supply locally, with quality and an economical product.”

Putting across his view, Holani adds, “In today’s industry, price is not the only factor. In fact, supply security has become a major question for every tyre industry and they are working towards the security of raw materials for themselves. This also happens to be one of the learnings from the Covid pandemic, which is why people are not going today for prices alone – they are making more strategic moves while selecting their raw materials supplier.”

                       Dr Raj B Durairaj, Director of R&D, Finorchem

                   

 
How India is at an advantage
While China was a major exporter of tyres to the US, this developed market is also looking for a sustainable second source, and India is the best second source, Katkar informs us. “We are already exporting 30 percent, which will eventually increase. Therefore, it is not only the raw material; if the industry wants to export, it will obviously require the raw material and rubber chemical, which is a major factor,” he avers.

Katkar goes on to mention that the major production of off-road tyres was in China. But now we see India bucking up, too. That’s because these are not very huge in volume and are specialised. “India can take up a major role after China,” he says and adds, “Initially, we were talking about quality tyres. But our tyre industry has really come up well to match European legislations, the tyre labelling etc. so that they can export passenger cars as well as truck tyres. And when talking about exports in the automobile industry, our tyres will also go well with OEMs.”

Reaching the hotshots
Finorchem already has a presence of almost 20-30 percent in the export market and is looking to grow that further in light of the problems present in China. “Everybody is looking at India as an alternate option in the China plus one policy, and we are definitely going to encash on that opportunity. The entire world is our market now, and we are certainly trying to make an impact in the global space,” Holani puts across.

Katkar further remarks that global tyre companies are already there in India in terms of footprint. So when they use Finorchem’s products locally and when the approval comes (which are global approvals), it automatically makes Finorchem flexible to supply to their global plant as well.

However, the bottom line is that foreign companies, like Michelin, are quality-conscious companies. Dr Durairaj states that their company’s goal is that if they can develop a quality product, with a high- performance product and the infrastructure that they are building in their R&D, then they can develop the chemical, test it, take it to the big players and convince them that, technically, theirs is a technologically driven company. Therefore, convincing them will definitely lead to their using it.

Giving an example, Dr Durairaj pronounces, “My product that I invented in the US is well known globally. The product has set the benchmark for all the tyre industries across the globe. Likewise, I want to do the same at Finorchem – developing a new chemical, which we have already started working on. For example, carbon black coupling agent is a new concept for our company. But we have already started developing that kind of a chemical. Every tyre industry is looking for that kind of a chemical so that it improves the magic triangle in the tyre. Likewise, if the chemical works, then not only can we get the patents to protect Indian technology, but at the same time, we can convince the big tyre players like Bridgestone, Michelin etc. to try to consider our chemicals in their tyre foundations. Thus, quality speaks for everything, which is our goal.

Going a little deeper, Katkar tells us, “The global organisations usually take a little time. Once they know that a company gives quality, they don’t go for just one quality product; they talk about the quality system. Once they are convinced that the company is a quality system, they may take a little time for the approval. But once the approval comes, it is through. In fact, we are already supplying to Goodyear and Continental that come under the first six in company ratings globally.”

Challenges to deal with
With every vision and strategy, the share of challenges is inevitable. Holani says that for Finorchem, the challenges are what everyone is facing. For example, there’s supply security. Like we know, China controls almost 70 percent of the market, and sourcing raw materials from other strategic sources can be very challenging, which is due to the supply and logistics constraints that the company has seen due to Covid.

“But I think that Covid has really prepared us for seeing the worst and how we can channel ourselves even in these difficult phases. So not only us but the entire industry is prepared to meet these challenges,” Holani further expresses and adds, “It won’t happen overnight, of course. It will take a lot of time, maybe decades. Thus, we are working in that direction, especially in the direction of Atmanirbhar Bharat. We are trying to develop raw materials in-house, go local and become self-sufficient.”

Room to manoeuvre
The Covid pandemic, despite the losses it brought to the world, taught it a lot, too, including the tyre and other industries associated with it. While going global is important, being significant locally is as pivotal. It’s important that the Indian tyre and rubber chemicals industries spot the prospects various scenarios in the world bring them and strategise accordingly. Where cost alone won’t play a crucial role, the truly effective factor that will vanguard the industry is quality. And that comes with being opportune, investing in R&D and being judicious about making available exactly what the customer is looking for.

 

Eurogrip Tyres, the leading tyre manufacturer in India, showcased its premium two-wheeler tyres at the 17th edition of Feria 2 Ruedas (F2R) International Motorcycle exhibition held at Plaza Mayor, Medellin, Colombia. The dates of this high-profile business event in South America's two-wheeler sector are 15–18 May 2025.

For more than 17 years, the Feria de las 2 Ruedas (F2R) has been the leading motorcycle industry event in Latin America. The expo, which takes place every year in Medellín, Colombia, is a vibrant venue for commerce, innovation and growth in the motorcycling sector. Additionally, it gives aficionados the chance to investigate the most recent developments and trends in the industry. The company showcased its premium lineup at exhibit N24 in the Tented Pavillion, which included a range of sport touring, off-road and trail tyres. High-performance versions including the Roadhound, Protorq Extreme, Trailhound STR, Climber, Bee Connect, Terrabite DB+ and Badhshah LX were on display.

P Madhavan, Executive Vice-President – Marketing & Sales, TVS Srichakra Ltd, said, “Eurogrip is focused to deliver innovative products for the global markets. Latin America is a priority market for us, and F2R Expo is a promising platform to engage with our target audience. We are looking forward to interesting business opportunities arising from this expo. Such specialised industry tradeshows add exceptional value to our quest in becoming a leading global tyre brand delivering world class tyre technology.”

Denka Company Limited announced it would record an extraordinary loss of approximately 16.1 billion yen (£85.8 million) as an impairment on manufacturing facilities at its US subsidiary. It will indefinitely suspend chloroprene rubber production at the Louisiana plant.

The Japanese chemical manufacturer, which holds a 70 percent stake in Denka Performance Elastomer LLC (DPE), cited mounting operational challenges, including unexpectedly high costs for pollution control equipment and declining production volumes at the American facility.

“DPE has faced significant cost, production and other challenges at its facility in the United States,” the company said in a statement. “Rising costs are attributable to, among other factors, identification, design, purchase, installation, and operation of pollution control equipment to reduce chloroprene emissions that DPE did not anticipate being required when it acquired the facility from E.I. DuPont de Nemours and Company.”

The subsidiary was established in December 2014 and acquired the chloroprene rubber business from DuPont in November 2015. The Louisiana facility was intended to serve as a second manufacturing site in North America, complementing Denka’s Omi Plant in Itoigawa, Niigata, Japan.

However, according to the company statement, DPE has struggled with multiple operational issues, including “rising energy costs and a shortage of qualified staff necessary to operate new pollution control equipment and implement other emission reduction measures. “

Production volumes have declined partly due to “operational restrictions arising from the pollution reduction measures and unscheduled plant outages associated with supply chain disruptions and severe weather events,” Denka said.

The company noted that these challenges, combined with changes in the global economic environment for chloroprene rubber, have pressured profitability, making near-term improvement difficult.

Denka confirmed that DPE employs 250 people as of December 2024 and will not restart its chloroprene rubber manufacturing facilities following a regular maintenance shutdown. Instead, “all options for the business, including a potential sale of the business or its assets, will be considered,” the statement said.

The company emphasised that “no decision regarding a permanent closure of the facility has been made at this time.”

Customers will continue to be supplied from current inventories and production at the company’s Omi Plant in Japan.

DPE is 70 percent owned by Denka USA LLC, a wholly owned subsidiary of Denka Company Limited, and 30 percent by Diana Elastomers, Inc., a subsidiary of Mitsui & Co., Ltd.

Yokohama Rubber reported a 56.9 percent year-on-year decline in profit attributable to owners for the first quarter of 2025, despite posting a 9.0 percent increase in sales revenue.

The Japanese tyre maker recorded a profit of 8.53 billion yen for the three months ended 31 March, down from 19.8 billion yen in the same period last year. Business profit fell 3.2 percent to 24.07 billion yen, while sales revenue rose to 275.12 billion yen.

The company maintained its full-year forecast, projecting an 11.4 percent increase in sales revenue to 1.22 trillion yen and an 8.8 percent rise in profit to 81.5 billion yen for the fiscal year ending 31 December 2025.

Yokohama Rubber attributed the profit decline to one-time costs related to its February acquisition of Goodyear’s off-the-road (OTR) tyre business, which it purchased for approximately 143 billion yen.

“Profit from existing businesses was strong,” the company said in its earnings statement. “In addition to increased sales volume for the company’s consumer tyres, mainly in overseas markets, and continued expansion of sales of high-value-added ADVAN, GEOLANDAR, and Winter tyres as well as high-inch tyres, profit was boosted by the MB segment’s MIX improvements and structural reforms.”

The tyre segment, which accounts for 91percent of the group’s consolidated sales revenue, saw a 10.4 percent increase in sales to 250.32 billion yen. Original equipment tyre sales were higher year-on-year, driven by “strong sales in Japan of vehicle models equipped with YOKOHAMA tyres and expansion of shipments for Chinese automakers’ new energy vehicles,” the company said.

Replacement tyre sales also increased, supported by higher sales of summer and winter tyres in Japan, increased sales of high-inch tyres in Europe, and stepped-up sales efforts in Asia.

The MB (Multiple Businesses) segment, which represents 8.4 percent of total sales, experienced a 3.2 percent revenue decline to 23.02 billion yen. This was attributed to lower demand from construction machinery makers in Japan and automakers in North America.

The company described an “upbeat” business sentiment in Japan for the quarter, noting that “a steady recovery in inbound demand and increasing orders for construction and logistics projects compensated for weak consumption by domestic households curbing spending in response to rising prices of consumer goods.”

Overseas, the company observed rising inflation concerns weighing on consumer spending in the United States, while in Europe, “manufacturing industries are rebounding and corporate business sentiment is improving.” In China, personal consumption was boosted by the Spring Festival holiday, but high US tariffs “reduced China’s exports and created uncertainty about the future that is weakening industrial activity.”

Swedish speciality chemicals firm Nynas reported solid financial results for 2024, posting an Adjusted EBITDA of 1,333 million Swedish kronor, marginally higher than the 1,316 million kronor recorded in 2023.

The company, which specialises in naphthenic speciality oils and bitumen products, attributed its performance to operational efficiency and commercial success in its niche markets.

“We are delighted with the progress made during 2024, evidencing our right-sized cost base and a more targeted commercial and manufacturing footprint. We have redefined our strategic direction, positioning Nynas as a speciality chemicals company, enabling the energy transition and setting our course for 2035,” Nynas CEO Eric Gosse said in a statement.

The firm highlighted strong cash generation from operations, which it said would support planned investments and longer-term growth initiatives. Nynas also mentioned the ongoing transformation of its Harburg site with plans to monetise the asset eventually.

All three of the company’s production facilities maintained high operational reliability between 95 percent and 99 percent. The Nynäshamn refinery achieved a notable milestone: in May 2024, it set a new monthly production record for naphthenic speciality oils at 42,000 tonnes.

Strategic pivot towards sustainability

Nynas outlined a strategic shift focused on higher-margin speciality materials with sustainable characteristics. The company aims to strengthen its position in European markets through innovation and sustainability initiatives.

“Nynas is uniquely positioned to contribute to the energy transition. Our strategy reflects our purpose to advance a more sustainable society, and our product development pipeline is fully aligned with this goal," Gosse added.

In 2024, the company received an EcoVadis Gold rating, placing it in the top 5 percent of globally rated businesses for sustainability performance.

With consecutive years of strong financial performance, Nynas indicated it continues to monitor debt capital markets to optimise its capital structure “at the appropriate time potentially”.

The Swedish chemicals producer noted that, having ceased operations in the United States in 2022, it remains largely insulated from recent global trade tensions surrounding US import tariffs. The company imports only minimal feedstock from America, shielding it from potential cross-border trade disputes.