Titan CEO: $1.9 billion forecast ‘conservative’
Despite a large number of backorders for earthmover tires, Titan International Inc.'s Chairman and CEO Morry Taylor is very optimistic about filling them in 2012. He is also optimistic about the company’s financial status, with forecasts that could come in much higher than expected.
“We’re going to have a great 2012. The agriculture business is going strong,” said Taylor in a conference call today. “We saw that in 2011 material pricing went up considerably. As we go into 2012, from the steel side, we think it will back off a little bit. We’re looking into a little more steadiness in material costs.”
In June 2011 Titan International established a new mining subsidiary, Titan Mining Services. Taylor sees strong 2012 growth not only in mining tires, but in earthmover tires as well.
“We have signed contracts with a number of mines. Our earthmover tire backorders are growing exponentially,” he explained. “When you look at our forecast of $1.7-$1.9 billion, we believe that is a very conservative range where we’re heading right now in orders. We have never had as many backorders as we have today.”
Taylor says Titan is “working feverishly to add equipment and eliminate bottlenecks” in tire production.
“The bottleneck we would have run into in 2012 would have been in the mixing capacity. We solved that situation by buying the whole facility from Goodyear in Union City.”
Taylor also discussed the status of the company’s purchase of Goodyear’s facility in France. The "put option" Goodyear Tire & Rubber Co. had for the Amiens, France, facility expired on Nov. 30, 2011. That killed the 2009 tentative deal Titan had made to acquire Goodyear's farm tire business.
Taylor said that the purchase was supposed to have been completed in March 2011.
“Goodyear had some problem and said, ‘We need it until the end of November,’ so we have helped them, good bad or indifferent,” said Taylor. “I believe that what happened in Europe is Goodyear allowed their lawyers to try and do it in legalese manners and they got hoodwinked a little bit by the union. The situation is - time ran out so the put option expired.”
Taylor said that Titan representatives will be flying to France Dec. 19 to meet with a court-appointed financial expert who is paid by the union. After the meeting, the financial expert will write a report to the French court.
Despite challenges such as this, Taylor remains hopeful that 2012 will be a strong year for Titan.
“I believe with what we’re doing and the success we’re having with certain products, through 2012 it’s going to be a sellers’ market,” he said. “I see us running in the upper ranges of our markets.”