Sweating It Out

It’s been the best of times and the worst of times for OTR tire dealers. Over the past three years, mining, quarry and construction customers have been crying out for new tires. But all the orders in the world mean nothing without tires.

As dealers know all too well, the real result of all that unfulfilled demand has been frustrated customers, missed opportunities and lost profits. And, with record-setting mineral prices, unprecedented original equipment sales, escalating surface-mining and heavy-construction activities, the ongoing war in the Middle East and continuing demand from China, India and Russia, dealers shouldn’t expect significant relief anytime soon. Many experts predict the OTR tire shortage to continue through 2010 or 2011.

“On some smaller-size tires, there is more product available in bias tires, but radials are still somewhat difficult to obtain, especially for certain sectors of the business, like mobile cranes and port equipment,” says Tim Good, manager of global customer accounts for OTR tires at Goodyear.

Shawn Rasey, executive director of North American sales for Bridgestone/Firestone Off-Road Tire Co., predicts “minimal relief” this year. “But, we do expect better supply to start in 2008 and beyond based on additional supply coming on line.”

Capacity Chase

Rasey is referring to the recent launch of large-scale capacity improvements by nearly every major OTR tire producer. Bridgestone, for example, announced plans to build a $270 million plant in Kitakyushu, Japan, devoted strictly to giant radial OTR tires. The plant is expected to open in 2009 and produce 30 tons per day by 2010. The company is also expanding OTR tire capacity at its existing plant in Shiminoseki, Japan.

Michelin poured $85 million into its Lexington, S.C., OTR tire plant to increase capacity there by 50% and expects its brand-new OTR tire plant in Brazil to start producing an annual output of 40,000 tons for the North and South American markets by the end of this year. “From Michelin, there will be additional capacity starting in late 2007 for small and medium sizes,” says John Funke, marketing director for Michelin North America’s earthmover tire division.

The Lexington expansion will address the surface-mining segment, while the Brazil plant will focus on the quarry and construction markets, Funke states. Titan International, according to Chairman and CEO Morry Taylor, plans to boost production by April at the Bryan, Ohio, OTR tire plant it purchased from Continental last August.

The company will also convert one-third of the capacity at its Freeport, Ill., tire plant from agricultural to OTR tire production and is adding OTR capacity to its Des Moines, Iowa, plant. Titan expects the Freeport plant alone to produce in excess of $60 million in OTR tires this year.

Yokohama Rubber Co., too, aims to lift OTR tire capacity in its Onomichi, Japan, plant by 520 tons per month by 2009. And, Goodyear will continue to explore ways to increase output at all of its plants globally, according to Good. Even with all that added capacity, hard-hitting shortages will continue to exist, experts say, especially in the giant OTR tire segment – 45- to 63-inch monsters – and that makes it even more difficult for tiremakers to keep up.

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Michelin Plans Major Expansion Project for S.C. Plants

(Akron/Tire Review) Michelin North America announced plans to spend as much as $350 million on improvements and expansion projects at al of its “major manufacturing facilities” in South Carolina.

The four-year project will add some 100 jobs, the company said.While MNA didn’t give plant-by-plant specifics, the company did say that the project includes capacity boosts for its OTR and X One super wide tires. Other aspects of the project will boost production of tire components at its semi-finished goods plants, and general improvements.

The company said its investment and job growth is based on finalizing agreements with state and county governments.

“With increasing competition from Asian imports and high raw material costs, Michelin will remain competitive in North America by continuing to manufacture tires in more efficient operations with skilled professional employees,” said Jim Micali, MNA chairman and president.

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