Finnish firm to consult on Filipino tire plant

MANILA, Philippines (Jan. 17, 2017) — The Philippines government and Finnish tire consultancy Black Donuts Engineering Inc. (BDC) are working together to set up a tire plant in the country, according to Black Donuts President and CEO Kai Hauvala.

A team from the Finnish company recently spent a week negotiating with Filipino officials about the construction of the plant.

"We are in talks with the Philippines government to offer analysis on the feasibility of building a new tire plant in the country," Mr. Hauvala told European Rubber Journal, a sister publication of Tire Business.

Negotiations covered the construction of a $200 million plant, possibly in the Mindanoa region, with the capacity of 4 million tires a year in the first phase. The tires, Mr. Hauvala said, are destined mainly for the domestic market, though it is possible tires from the plant could be exported as the Asian markets grow.

It is unclear what kind of tires the plant will produce, though Mr. Hauvala said passenger car and SUV tire are the "most preferred" option. Additionally, Mr. Hauvala said that licensing discussions were not part of the initial phase and that the final structure details as well other partnerships will be determined later.

More details about the project are expected in February.

According to Mr. Hauvala, the plant is being set up to generate more added-value for natural rubber resources in the Philippines and create new industry platforms. The goal, he explained, is to create jobs, expand upstream and add more natural rubber plantations.

Yokohama Rubber Co. Ltd. operates the only new tire plant in the Philippines, a car and light truck tire factory in the Clark Freeport Zone, where an expansion to 12.5 million tires a year was brought on stream late last year.

Pirkkala, Finland-based Black Donuts is an independent consultancy offering turnkey tire plant engineering formed in 2011.

Mr. Hauvala is a former Nokian Tyres P.L.C. engineer who helped found Black Donuts. He worked for Nokian for more than 16 years in various positions, according to his LinkedIn profile.

Sales Director Tomi Pekkola also is a former Nokian executive, with 15 years' experience with the tire maker.

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Shahrzad Pourriahi is a reporter with European Rubber Journal, a London-based sister publication of Tire Business.