DRIVING IT UP
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While we are established in certain
markets, we continue to seek growth
in new territories. Our joint venture in
India, with our strategic shareholder
and long-time principal Sumitomo
Rubber Industries Ltd, is relatively
young. This joint venture (Falken
Tyre India) eked out a small profit in
FY2016 for our 40% stake, turning
around from a loss in the past two
years. By the way, Stamford Tyres
has been a distributor of Falken
for Sumitomo Rubber Industries in
selected markets since 1975, which
was 41 years ago.
WHEEL MANUFACTURING
Adding to the list of positive news is
our long-time wheel manufacturing
business in Thailand, which had its
second consecutive profitable year
in FY2016. This was helped by lower
material and energy costs. The
order flow for the factory was good
and the factory’s utilisation capacity
stayed high.
TOUGH MARKETS
South Africa, where we are the sole
distributor of Falken tyres since
2009, remains challenging. The
increased supply of tyres by foreign
manufacturers has added to the
challenging environment. However,
we narrowed our losses to a near
break-even level in Q4FY2016. We
have implemented cost-cutting
steps coupled with measures to
mitigate any volatility of the South
African Rand. We are now fully
hedged and have secured higher
local currency trade lines. Demand
for passenger car tyres in South
Africa remains stable and we look
forward to growing our truck and
earthmover tyre sales there in line
with the recovery of the mining
sector.
We, however, continue to face stiff
competition from distributors of
competing brands and the effects of
weak economies in many markets,
such as Europe.
DIVIDEND
The Board is proposing a final
dividend of 1 cent per share for
FY2016, which is unchanged from
the previous year and subject to
shareholders’ approval at the AGM.
APPRECIATION
I wish to express our gratitude to
shareholders, customers, suppliers,
staff, bankers, and business
associates for your support and
confidence in us.
One person I cannot thank enough
is Mr Chua Kim Yeow, who has been
with Stamford Tyres for 25 years. At
age 90 now, he has stepped down as
our Senior Advisor after many years
being our Chairman and loyal friend.
His long ties with the company and
the wise counsel he shared with
us began after he retired from an
illustrious career, where he held
posts such as Accountant-General
with the Ministry of Finance,
Executive Chairman of POSB and
President of the Development Bank
of Singapore.
Another note of appreciation goes
to Mr Patrick Berriman, who has
been with Stamford Tyres for
almost 11 years. At the age of 60,
he has relinquished his Senior Vice-
President position. We are pleased
that he has since assumed the
role of management consultant to
oversee our operations in Australia.
I would also like to thank the Board
of Directors for their support and
guidance. We all look forward
to telling you more about our
business, and answering your
questions, at the AGM in our
office in Lok Yang Way.
WEE KOK WAH
President
ANNUAL REPORT 2016
