Local tyre producers suffer small impact from US tariff
Local companies do not have to worry about a preliminary anti-subsidy tariff imposed by the US Department of Commerce on car and truck tyres from Viet Nam, executives told local media.
Earlier this month, the US agency determined exporters and producers from Viet Nam would receive a tariff ranging from 6.23 per cent to 10.08 per cent with concerns Viet Nam might have undervalued its currency to support exporters.
The decision was made after the US agency had launched an investigation into tyre imports from South Korea, Taiwan, Thailand and Viet Nam in June.
The rates imposed by the US Department of Commerce are 6.23 per cent for Sailun (Viet Nam) Co Ltd, 10.08 per cent for Kumho Tires (Viet Nam) Co Ltd and 6.77 per cent for other companies. Kumho Tires and Sailun are from South Korea and China.
But according to SSI Securities Research Centre, this may not have a significant impact on Vietnamese tyre producers.
Da Nang Rubber JSC is not affected by the US decision as it is applied on radial tyres, which are completely different from the firm’s outputs subject to the tariff, the company’s spokesperson told ndh.vn.
Exploring the US market is expected to help the company improve this year’s results after the business community has been struggling with the global spread of the coronavirus and the US-China trade war, the spokesperson said.
Da Nang Rubber JSC posted a 12 per cent on-year decline in export revenue year to date. Its key export market – Brazil – has seen a slight recovery in the last two months.
In 2019, the company earned VND1.73 trillion (US$74.5 million) worth of exports, up 43 per cent year-on-year and accounting for 42.9 per cent of the full-year revenue – up 7.3 percentage points from 2018. Export revenue earned in American countries surged nearly 60 per cent year-on-year to VND1.04 trillion in 2019, accounting for 62 per cent of the total.
General director of the Southern Rubber Industry JSC (Casumina) Pham Hong Phu told ndh.vn that the company’s products are subject to the decision.
“The US tariff is not too high so the business will not suffer from the decision. Besides, Casumina exports to 30 overseas markets, including the US,” he said.
The company also produces radial tyres. Radial tyre export accounted for 64 per cent of the company’s total export revenue in 2019.
Casumina posted a 27 per cent year-on-year increase in total export revenue last year, which reached VND1.72 trillion.
Export revenue accounted for 39 per cent of the company’s total revenue in 2019. The figure rose 29 per cent in four consecutive years.
Meanwhile, Sao Vang Rubber JSC sells tyres to Asian markets such as Nepal, Pakistan, Cambodia and Malaysia.
After the US tariff was announced on November 4, Vietnamese tyre companies have seen mixed changes in their share prices.
Shares of Da Nang Rubber JSC (HoSE: DRC) fell a total of 1.8 per cent in the two trading days ending November 6.
Shares of Casumina (HoSE: CSM) declined by total 2.7 per cent and Sao Vang Rubber JSC (HoSE: SRC) gained a total of 1.8 per cent in the same period. — VNS
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