Tyre maker gets a grip on free trade opportunity

Ahmad Zubir Mursina, managing director of DMIB, welcomes the advent of greater regional competition

ike many Malaysian manufacturers, DMIB is preparing for the opening up of the free trade area among Asean nations next year. The tyre maker, a member of the Sime Darby Group, is already present in all the Asean member states and believes the quality of its products will enable it to survive competition.
“The impact of the free trade area on Malaysia and DMIB in particular is going to be serious, no doubt about it,” says DMIB managing director Ahmad Zubir Mursina. “The labour costs of tyre production in Thailand and Indonesia are much lower and we cannot compete in those terms. What we can do is to compete with them in terms of quality, and in speciality products.

“Our strategy is to be cost efficient, so we will be looking at product rationalisation. We will focus on products that give us a better margin and better productivity in terms of man, machine and material utilisation.”
DMIB makes a wide range of tyres, from giant ones for earth-moving equipment to scooter and high-performance tyres. The firm has also developed a special type that can be used on muddy slopes during the rainy season for oil palm crop harvesting equipment.
“I look upon the free trade area not as a trap but as an opportunity,” continues Mr Mursina. “We look on the positive side of it, in that it’s like having a bigger domestic market that we can penetrate. Not many countries in Asean make such a full range of tyres as we do.”

Few manufacturers in the Asean have such a wide and diverse product range

DMIB, which has about half the domestic market share, exports to more than 50 countries, including Britain
where it has been established for 15 years. “We are competing against at least 80 different tyre brands in the UK market alone,” says Mr Mursina.
“I believe people are now going more and more for value-for-money. Brand loyalty is less and less important. Price and quality are the two key elements.”
DMIB has changed its strategy in the UK, organising its own distribution to retailers instead of using a wholesaler. The firm claims to be able to deliver tyres anywhere in the UK within 24 hours.
DMIB is also raising its profile through its association with the Asian PGA tournament – the firm makes the official golf balls for the event. The firm’s own golfing event, the Thommo Challenge, is the biggest in the country, with more than 64 golf leagues involved.

Another area in which DMIB is carving itself a solid reputation is off-road tyres. Malaysia’s Rain Forest Challenge has become one of the world’s major off-road events and DMIB has a high profile in it. Last year more than 30 countries participated in the challenge.
Mr Mursina stresses that this is not a race through virgin tropical forest. “We don’t ruin the forest because we use logging tracks,” he says. In any case, in the rainy season the tracks are washed away and new growth quickly takes over.