DRC Expected for Breakthrough

2:36:07 PM | 9/18/2018

Rising input costs and growing competition sent Da Nang Rubber Joint Stock Company (DRC), a leading tyre brand in Vietnam, into a dilemma. But, intensive investments and innovative responses to development trends have enabled the company to affirm its brand position, increase its market share and stand ready for new breakthroughs.

DRC was established in 1975 from a US Army's truck tyre factory. In 2006, DRC went public to become a joint stock company. Currently, DRC is specialised in manufacturing, trading, importing and exporting products, materials and equipment for the rubber industry. DRC's main products include automobile tyres, bicycle tyres and other specialised tyres and inner tubes.

Apart from its privatisation to operate as a joint stock company in 2012, the remarkable milestone in DRC in more than 40 years of development is also its innovative decision of adopting the radial tyre trend by investing nearly VND3,000 billion in construction of a radial truck tire factory with a yearly output capacity of 600,000 tyres in Lien Chieu Industrial Park (Da Nang).

DRC's radial truck tyre plant was inaugurated in 2013 and launched the first DRC brand truck tyre in Vietnam, marking a historic milestone of the company's development history. This was also the first large-scale, modern tyre factory in Vietnam at that time.

Currently, Bias and Radial tyres are DRC's two main product lines, accounting for more than 80 per cent of its total sales (2017 data). As for the DRC radial tyre lineup, after four years, it contributed 35 per cent of the company's total sales and grew 45 per cent in 2017.

Mr. Nguyen Thanh Binh, General Director of DRC said that, thanks to well-prepared investment and advanced technology, DRC products are of very high quality and trusted by consumers. "At present, DRC's radial tyres and tubes are sold widely in the domestic market, exported to more than 30 countries and territories, and appreciated by customers for premium quality, various design and reasonable prices," he said.
High-quality products of different types and specifications plus a broad distribution network enable DRC to constantly expand its market share. Radial tyre sales growth has been very impressive, topping 30 per cent a year, rising from over 175,000 tyres in 2015 to 235,000 tyres in 2016.

DRC has also made great strides as a strategic supplier of tyres and tubes for many manufacturers and assemblers of automobiles, bicycles and motorbikes in Vietnam, and continuously expanded its export markets. In 2017, DRC's export value reached over US$30 million. In addition to traditional markets, DRC is promoting other potential markets such as India, Russia and the United States, and emerging markets like Brazil and Malaysia.

Growing competition and rising input prices have led DRC into a dilemma and caused its profit to decline while revenue and market share have been expanding for several years. However, with its intensive investment and its quick response to Radial tyre trends, especially in the condition that Vietnam has a developing automobile and motorbike industry and advocates increasing the localisation rate of components and encouraging supporting industries to develop, the opportunity for DRC to make great strides in the coming is discernible.

Quoc Hung