BLOG: SRI moves clarify once-muddy Dunlop brand rights picture

AKRON (Dec. 11, 2013) — Sumitomo Rubber Industries Ltd.'s recent deal to secure the production and sales rights to the Dunlop brand throughout Africa is perhaps the penultimate step toward resolving the splintered brand marketing puzzle that emerged out of Dunlop Holdings' bankruptcy nearly 30 years ago.

At that time, Birmingham, England-based Dunlop Holdings controlled the rights to the Dunlop brand throughout most of the world — it already had assigned the rights in Asia/Pacific to others — but its acquisition in 1984 by diversified industrial conglomerate  BTR P.L.C. and subsequent dismantling changed all that.

The brand — named for the acknowledged inventor of the pneumatic tire, Scottish veterinarian John Boyd Dunlop — at that time was considered the fourth most widely sold brand worldwide, trailing only Michelin, Goodyear and Bridgestone.

The brand continues to be a major force worldwide, despite still being marketed by five separate entities. Worldwide, it's still considered to be the fifth or sixth most prominent brand.

The process started in 1985 when BTR sold Dunlop Holdings' British and German assets and brand rights to Sumitomo Rubber — the one-time Dunlop Holdings subsidiary that at that time held the Dunlop brand rights for Japan and parts of Asia.

The deal was complicated by the separate bankruptcy of Dunlop France, which forced Sumitomo to strike a separate deal later that year for that entity in order to gain control of the brand name throughout Europe.

Dunlop Tire Corp., the U.S. subsidiary in Tonawanda, N.Y., went into private hands with control of the brand in the U.S., Canada, Mexico and some Caribbean territories.

Separately, an entity called Dunlop International Tyres Ltd. emerged out of ashes of the Dunlop Holdings demise, overseeing the former Dunlop South Africa and Dunlop-brand sales throughout most of Africa and the Middle East.

Sumitomo moved quickly thereafter, acquiring Dunlop France and 18 months later acquired Dunlop Tire Corp., and with it the brand rights throughout North America, including some of the Caribbean.

The situation remained stable for the next dozen years, until 1999 when Goodyear and Sumitomo struck their ongoing joint venture, whereby Goodyear acquired 75-percent control of SRI's tire assets in Europe and North America (including marketing rights in Puerto Rico, U.S. Virgin Island, Mexico and the French overseas territories in the Caribbean).

Goodyear also controls the brand rights in Australia and New Zealand as a result of its acquisition in 2006 of 100-percent control of South Pacific Tyres Ltd., its Australia–based joint venture.

Separately, SRI re-acquired rights to the Dunlop brand throughout Latin America in 2002 from Dunlop Africa, a business deal that played into SRI's decision two years ago to build a plant in Brazil to serve South America.

In the interim, India's Apollo Tyres Ltd. acquired Dunlop Tyres International in 2006, taking over the brand rights in most of Africa and parts of the Middle East.

SRI's acquisition of Apollo's plant in Durban, South Africa, and the unit's Dunlop-brand rights closed that loop in the Dunlop global constellation. .

There still exist two key “holes” in SRI's Dunlop marketing network — India and Malaysia, where the rights to the brand belong to Indian conglomerate Ruia Group and Continental A.G., respectively, due to acquisitions.

Ruia bought Dunlop India Ltd. eight years ago, but the Dunlop business has been largely idle the past several years due to contracted labor disputes. An India court even ordered the liquidation of the business in 2012,

but that order since has been stayed by India's High Court, according to various Indian media.

In Malaysia, Conti controls the brand because of its 2003 purchase of majority ownership of DMIB Sdn. Bhd./Sime Tyres International Sdn. Bhd., which had controlled the brand rights for decades prior to Conti's purchase.

In India, SRI is working around the brand rights dilemma by focusing for now on its Falken associate brand. SRI and Singapore-based tire distributor Stamford Tyres Corp. Ltd. set up a 60/40 sales joint venture in India, Falken Tyre India Pvt. Ltd., in 2012, hoping to leverage Sumitomo's proprietary tire technologies and Stamford's distribution capability to establish the Falken brand name in India, the partners said at the time.

Clarifying the Dunlop brand situation also plays into Sumitomo Rubber's "Vision 2020" growth strategy through 2020 — growing roughly 8.5 percent a year for the next eight years while achieving an operating income ratio of at least 12 percent, which should push the Kobe, Japan-based firm close to $15 billion in annual sales by then.