Plentiful low-cost truck tire

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Get ready for R-1234yf

Plentiful low-cost truck tire imports cloud retreaders’ outlook

By Ann Neal

Production of retreaded truck tires grew nearly 5% in 2014, according to Modern Tire Dealer market data. Yet David Stevens, managing director of the Tire Retread and Repair Information Bureau (TRIB) says retreaders expect a fat year in 2015. “I don’t think anyone is forecasting much in the way of growth,” he says.

One reason for the lackluster outlook is the growth of low-cost truck tire imports. “Te hope is that with some of the continued investment in trucks, you get more trucks out there, so there’s more replacement demand that will go to the retread business. But puting constraints on that is competition with low-cost import tires,” says Stevens.

Service Tire Truck Centers Inc. of Bethlehem, Pa., is “continually watching the pricing coming from Chinese imports, which is pressuring the Tier 2 tires and retreading,” according to Scot Bennet, vice president of sales. Te company is ranked No. 12 on this year’s Top 100 list, up one spot from last year.

Imports are afecting casing supply at Allen Park, Mich., based Belle Tire Distributors Inc., which is ranked No. 22 , down two spots. “Casings continue to be an issue in regards to major brands,” says Tom Bowman, vice president of the commercial division. “With all the Tier 3 and Tier 4 imports fooding our North America market, the quality is geting tougher to fnd in the Tier 1 and Tier 2 casings.”

Bill Ziegler, president of Ziegler Tire and Supply Co., says the Massillon, Ohio-based company has been challenged by casing supply and price competition. “Casing availability has been very difcult for the year, although it has been easing up. Casing prices are starting to drop a litle. Te low price on Chinese tires has defnitely started to squeeze the pricing on retreads and this has afected our volumes. As the raw material prices have declined the retread rubber manufacturers have been slow to lower prices and the Chinese imports have been quick to lower their prices,” he says. Te company is No. 27 in the rankings, up two spots from last year.

Customers choose a lower cost tire because they don’t understand cost per mile, according to Rick Majewski, vice president of Wilson County Tire and Retreading in Lebanon, Tenn. “I think they ought to put a tarif on Chinese tires to pay for the highways because they’re pricing the tires so low they are going to put the retreader out of business. If everyone retreads a premium product, the retread will outrun the Chinese tire in mileage. But people don’t look at long-term cost, they look at acquisition cost, that’s the problem.”

Wilson County Tire and Retreading is part of Sumerel Tire Service Inc., which is owned by Rick’s brother Bob Majewski. Te Newport, Ky.-based company is ranked No. 60 on the list,

Andrew Stivers applies tread rubber at the Great Lakes Best-One Tire and Service’s Bandag retreading plant in Alliance, Ohio. The plant’s 13 employees retread more than 100 truck tires a day during the spring season. Plant manager Jerry Baniecki says an expansion is planned in the next few months. The 34,000-square-foot plant includes a retread shop, offce space and pull-through service bay.

up three spots from last year. Te plant opened in July 2014 and has seven employees. Even with the pricing pressures from imported tires, the plant was proftable by August. Majewski says his core customers are dealers who do not have their own retread plants, and he expects business levels to double in 2015.

While volumes were higher overall, business levels were down for OTR retreaders serving the mining industry. Government regulations placed on coal mining and the use of coal in power generation are behind the decline, according to Jim John of Craf Tire Inc./Shrader Retreading in Uniontown, Pa. “Also, road construction and housing construction are still lagging behind a normalized pace.” Te company dropped two spots to No. 37.

Acquisitions in a nutshell

Several dealers added market coverage and retread capabilities through acquisition. Best-One Tire & Service purchased a Bandag retread plant in Alliance, Ohio, from American Tire Distributors Inc. (ATD) in August 2014. ATD had acquired the plant from Terry’s Tire Town Holdings Inc. earlier in 2014. Te Alliance plant operates under the Great Lakes Best-One Tire & Service banner. Best-One Tire Group now has 16 retread plants and holds the No. 5 spot, the same as last year.

Also in August 2014, McCarthy Tire Service Co. Inc. purchased Terry-Haggerty Tire Co. from Jim and Tom Terry. Te acquisition gave McCarthy a combined commercial-retail location and a stand-alone retread shop in Albany, N.Y. Te purchase increased McCarthy’s production capabilities for Bandag retreading by 200 units a day. McCarthy now has

seven Bandag retread plants and one OTR retread plant. Te Building business through training Albany plant helped push it to No. 7, up one spot from last year. Jack’s Tire and Oil Management Co. Inc. is training its sales

Bob Sumerel Tire Co. Inc. of Erlanger, Ky., gained a Bandag force to beter understand issues unique to feet owners and plant in Wooster, Ohio, as part of a transaction involving fve managers. Te Logan, Utah-based company is ranked No. Kaufman Tire Inc. locations. Te purchase increased capacity 20, down two spots. “Everybody sells tires and retreads. We by 150 truck tire retreads a day. Bob Sumerel Tire now has six have to make sure we understand their hot butons,” says Bob retread plants and ranks No. 16, the same as last year. Feldbauer, CEO and president. Te hot butons for trucking

ComCar Industries Inc. of Auburndale, Fla., retreaded its companies are driver retention and compliance with the federal government’s Compliance, Safety, Accountability (CSA) initiative to improve feet safety. Feldbauer says the training helps the sales force explain how quality retreading services help fleets maintain CSA scores and retain drivers. Heartland Tire Inc. began training its customers in the nuts and bolts of retreading operations in 2014. Based in Continental’s BestDrive branding is Brainerd, Minn., Heartland visible throughout the lobby of its Rather than walking customers through a typioffers retail and commercial plant in Detroit, Mich., which began cal plant tour, Heartland Tire immerses them in services through 12 locations. operating in March. The plant is retread operations through a two-day, handsTe company acquired fve retail Continental’s third company-owned and operated plant in the U.S. on training session. The training program is helping Heartland to develop more business. stores in the Minneapolis area in October 2014. Heartland own casings for its trucks up to November 2014. At that time, retreads tires for its commercial stores as well as retread ComCar sold its Bandag plant to Boulevard Tire Center based customers across the Midwest. Te company holds the No. in Deland, Fla. ComCar was retreading about 9,000 medium 88 spot; it was not ranked on the Top 100 last year. truck tires annually. Boulevard now has six retread plants and “Many people have taken a plant tour at one time or another, holds the No. 15 spot, the same as last year. but that is just a quick snapshot of how a tire fows through the plant,” says Jim Anderson, director of retreading. To educate More “BestDrive” shops open customers about its process, benefts and value, Heartland

“Others” account for 4.5% of domestic retreaded truck expanded the typical plant tour to two days of hands-on training. tire market share, behind Bridgestone Bandag Tire Solutions Heartland splits atendees into two groups of fve or six. (42%), Goodyear Tire & Rubber Co. (25%), Michelin Retread One group learns about tread designs, correct application, Technologies Inc. (23.5%) and Marangoni North America warranty information and more in a classroom seting as the Inc. (5.%). “Others” includes Continental Tire the Americas other group is trained in the plant. LLC, which opened its newest company owned and operated Te atendees spend the most time in the initial inspection retread shop in March 2015 in Detroit, Mich. It is one of three and the RR (Returned as Received) areas. “Let’s face it; we as Continental plant locations in the U.S. Te shops are branded an industry haul around way too many casings that will never “BestDrive.” A BestDrive retread plant has been operating in make it through initial inspection,” says Anderson. “Te only Memphis, Tenn., since September 2014 and in Phoenix, Ariz., way to make this situation beter is through educating the since May 2011. Production for the three BestDrive plants customer who will in return educate the end user.” places Continental at No. 42 on the Top 100 list. Anderson says there is no beter way to educate a customer

Continental is focused on creating a retread footprint that than placing him or her alongside the person working the will allow it to beter service feet business, according to R. initial inspection station. Te knowledge acquired is carried Scot Miller, ContiLifeCycle manager for the U.S. and Canada. out into the feld where commercial tire salespeople can add

“Our strategy is to target retread opportunities that include value to their end users. Customers also examine examples of existing retread operations for conversion such as Piedmont returned as received casings. Learning why a casing is rejected Truck Tires in North Carolina or to partner with entrepreneurial is more efective than seeing a note on a report that a tire did new start-ups as we did with DLS Retreading in South Carolina. not make it through the inspection process. Our fnal approach is to establish our company-owned BestDrive Te company is launching a monthly newsleter for retreading retread tire facilities in markets that have a high demand for customers in April 2015. Heartland is also gaining more exposure retread where the frst two options are not available.” through trade shows, event sponsorship and involvement in

Continental says 13 independent dealers are ContiLifeCycle relevant trade associations. activities which Anderson says are licensees. With the exception of Piedmont Truck Tires and paying dividends already. “It doesn’t mater what industry you’re DLS Retreading, the company declined to identify them or in, you must fnd new ways to beter serve your customers and discuss plans for new licensees and company-owned locations. make it easy for them to do business with you,” he says. ■