The Rise of the Tire Industry in Guangrao County

"The world tires are from China, China's tires are from Shandong, and Shandong tires are from Guangrao."


This is a sentence that has been hailed by Guangluo people for a long time in the tire circle. From small county to international market, from hand workshops to famous brand enterprises, from small rubber furnaces to large tire production lines, the development of Guangrao tires and the achievements have been admirable.


Tracing back to the rubber tire industry in Guangrao County for more than 30 years, from the family workshop to the evolution of large-scale and specialized production, the industrial chain has gradually expanded from pre-production, production to post-production, and the industrial scale has been expanding. At present, the production of private tire enterprises in Guangrao County has accounted for half of the province, and a quarter of the country. Guangrao has become a veritable “tire capital”.


From "small rubber furnace" to a large industry


The Guangrao rubber tire industry originated in the 1970s. It was originally produced with a "small rubber furnace" to produce rubber pipes and agricultural tires. In 1984, when the Xingyuan Tire Group was established, the low-rise bungalow was the processing workshop, and 11 shareholders led 40 to 50 people, starting from the production of rubber hoses and rubber products. In 2002, Xingyuan Group launched the all-steel radial tire, and the company's development entered the fast lane. Today, Xingyuan Group has become a large-scale tire enterprise with an annual output of 5.8 million sets of all-steel radial tires and seven leading brands such as Hualu (HILO), National Treasure and Annet.


In the early 1990s, Guangrao County aimed to “make bigger and stronger rubber enterprises and lengthen the industrial chain”, and guided enterprises to demolish small workshops, and successively built projects such as polymer spinning, steel cords and rubber additives. The industrial chain continues to grow. Since 2002, Guangrao County has vigorously implemented the strategy of “industrial strong county”, constantly adjusting its product structure and vigorously developing the radial tire industry. In less than 10 years, Guangrao County's rubber products industry has grown from obscurity to an important national radial tire production and export base, as well as the largest rubber industry cluster. During the period, Guangrao's development of the midday tire experienced a trilogy: adjusting the structure of the radial tire project, expanding the scale of production capacity, and implementing the brand strategy. By the end of 2010, the county's tire production capacity reached 111 million, with all-steel radial tires, semi-steel radial tires, engineering radial tires, engineering giant tires, bias tires and other 12 categories of more than 200 varieties of products, formed Rubber tires are the center, which integrates natural rubber planting, steel cord, tire cord fabric, rubber auxiliaries, tire molds, tire machinery, tire capsules, carbon black, wheels, brake pads, brake discs, etc. The industrial system has formed Guangrao's unique development model of the radial tire industry cluster, which was named the first batch of SME industrial clusters in Shandong Province.


However, in recent years, affected by internal and external factors such as product level, environmental assessment, trade barriers, etc., the development of the tire industry in Guangrao County has been challenged as never before. Guangrao County actively responded to the country's requirements for capacity and green development strategies, and carried out drastic reforms in terms of production capacity, exports, and environmental protection. Beginning in June 2017, Guangrao County decided to introduce a tire-related industrial enterprise or listed company with a state-owned background as a platform company and operator of the platform company that integrates Guangrao tires, and reorganized many tire companies such as Hengyu Technology. In February 2018, Qingdao Double Star took the lead in co-sponsoring the establishment of “Youchuang No.1 Fund” jointly with Guangrao Finance and Shandong Yinji as a platform for mergers and acquisitions and reorganization to accelerate the transformation of the old and new kinetic energy of Guangrao tire industry.


From "same quality production" to "high-end customization"


From 2002 to 2012, it can be said that the Guangrao tire industry has developed rapidly for ten years. In the past ten years, a large number of large and small tire companies have sprung up. Vicious competition has also led to a decline in the profit of the entire tire industry. Under this circumstance, many tire companies have decided to go out of the price competition and the production of homogenized products, and transform and seek development.


Shandong Hongsheng Rubber Technology Co., Ltd. under the jurisdiction of Shandong Huasheng Group invested tens of millions of yuan each year to introduce world-class R&D equipment and outstanding technical talents. Under the continuous attack of the top domestic technical team, it has lasted for 5 months. Finally successfully down the line. High investment has resulted in high returns. As of now, the company has implemented “private-custom” tires for nearly a thousand drivers in more than 100 racing clubs, with a much higher profit margin than ordinary tires. After three years of transformation and development, the proportion of low-end products of Shandong Huasheng Group has dropped from the initial 100% to 45%.


There are 54 Guangrao County enterprises above the scale above, such as Shandong Huasheng Group. As a national special industrial base for radial tires and an important rubber tire export base in the country, at present, the county's comprehensive tire production capacity has reached 175 million, including 140 million tires for semi-steel radial tires and 35.10 million tire tires for all steel. Ten thousand, the radial tire production capacity accounts for about 25% of the country, 47% of the province, and the meridian rate reaches 95%.


As one of the leading industries in Guangrao County, rubber tires have been developed from extensive and low-end production to green and intelligent. Targeting the industry's cutting-edge technology and high-end products, implementing the innovation-driven strategy, enhancing the company's innovative main position and independent innovation capability, and accelerating industrial transformation and upgrading. Vigorously promote technological innovation in enterprises, increase investment in “soft” and “hard” facilities, strengthen docking with top universities and research institutes in the field, establish a platform for cooperation between industry, universities and research institutes; increase talent introduction and build high-level R&D teams; Strengthen the construction of scientific research platforms, purchase advanced research and development equipment, and build a number of enterprise technology centers and engineering centers at or above the provincial level. At present, Guangrao County has 7 provincial-level enterprise technology centers in the rubber tire industry, 3 municipal-level technical centers, and 1 provincial-level industrial technology center. It has established the Rizhao Rubber Tire Sub-center of the National Tire and Rubber Products Quality Supervision and Inspection Center, the Guangrao Research Institute of the National Tire Process and Control Engineering Technology Research Center, and the Dongying City Rubber Rubber Tire Industry Technology Research Institute. The research and development results are constantly being updated.


From physical marketing to "Internet +"


The inevitable result of overcapacity is the surplus of products. In the traditional industries dominated by the buyer's market, how to expand marketing channels and open up new consumer markets is an important issue.


As the first industrial Internet platform in Guangrao County, in 2015, the “Taiwan King” e-commerce platform was officially launched. With the help of Internet tools, focusing on the passenger tires, the unique combination of the Internet and customization has taken the lead in setting off the business model innovation boom in the tire industry. “Our platform is a whole industry chain ecological platform integrating intensive procurement of raw materials, factory customization, direct logistics and chain service stores. Through brand alliance and resource integration, we will create an industrial community and provide a new model for the industry. , new retail, new kinetic energy, new ecological 'system solutions.' As the "old tire man" who has been in the tire industry for most of his life, Zhu Yuncheng, chairman of the tire king, has full confidence in the future of the market.


Coincidentally, the “Tenzhihui” tire e-commerce platform is based on the physical market industrial cluster of tire production, and the physical and commercial logistics resources, to build the O2O business ecosystem, and create an “online cluster service” for its offline entities. platform". “E-commerce companies have an advantage in the sales of rubber tires. They can create a targeted and professional online trading trading platform through the 'three-level distribution system' to promote the development of rubber tire business and improve the quality of tire products.” Zheng Xingyu, chairman of Tire Zhihui E-Commerce Co., Ltd. said.


Guangrao County Tire Enterprise actively follows the trend of “Internet +” and pays attention to the promotion and application of e-commerce. At present, the tire king and fetal wisdom e-commerce platform is operating normally; Guangfeng Rubber Tire Trading Center is operating smoothly. This is the first rubber tire bulk commodity spot trading market in the province and it is “Internet + bulk raw materials and finished products + high-end financial derivatives”. "Investment trading" in an innovative e-commerce trading platform.


Faced with the severe domestic and international development environment of the tire industry, it is a new normal for enterprises to go global and achieve international development. Guangrao County is the first batch of national-level export tire quality and safety demonstration zone, and its products are exported to 182 countries and regions. We will seize the historical opportunity of implementing the “One Belt, One Road” strategy, and take the initiative to move closer to international big companies and internationally renowned brands to achieve greater development and leverage. Sai Lun (Dongying) Tire Co., Ltd. wholly-owned construction of the all-steel radial tire production line in Vietnam, and Xingyuan Group and Japan Yokohama Rubber Co., Ltd. jointly launched the engineering tire project. At the same time, the brand influence has been continuously expanded. Guangrao County has continuously held the 10th China (Guangrao) International Rubber Tire and Auto Parts Exhibition. The brand awareness of Guangrao Tire has been continuously improved. At present, Guangrao County owns 6 well-known Chinese trademarks such as “Hualu” of Xingyuan Group; 38 provincial famous trademarks and provincial famous brand products. (谭芳)


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