2018 TIA OTR Tire Conference Wrap-up
One of the highlights of the annual Tire Industry Association (TIA) OTR Tire Conference is the tire manufacturers’ panel discussion. This year, seven companies had executives participate. The 2018 panel discussion was held on Feb. 23, which was prior to the government’s announcement that it would be looking to impose tariffs on steel and aluminum. Each panelist was given the opportunity to discuss his company’s position in the market, views on the industry and plans for the future. What follows is a summation of each panelist’s prepared comments.
Gary Pompo, manager of field technical services, BKT USA Inc. Pompo said his company sees construction and coal coming back in spots, with aggregate ore showing significant growth. He reported that BKT’s dealers are very optimistic about the current market conditions.
Pompo said the new infrastructure bill will strengthen demand even more. With this increase in demand, he said dealers are concerned about shortages in certain sizes of OTR tires, particularly in the U.S., Russia, Indonesia and Australia. BKT is increasing production at its Bhuj, India, plant to 30 tires per day in the 45-inch and 49-inch sizes.
As the economy continues to grow, companies are having problems finding drivers to operate equipment, he said. Both the heavy-equipment industry and trucking companies are seeing shortages. Relating it to tire dealers, Pompo said he believes that getting the “younger generation” of operators and technicians will be “our largest problem as an industry.”
Rob Seibert, director of OTR marketing, Bridgestone Americas Inc. Seibert echoed the optimism in the market, pointing out that the upturn began in 2017. “We’re looking forward to looking back at 2018 and seeing positive industry trends into 2019.”
He said even as the industry is growing, “we need to keep in mind that the industry is ever evolving and ever changing.” Simply put, the customers are demanding more from dealers and manufacturers alike. With a focus on safety, productivity and profitability, the customers are asking their vendors to find ways to use data-driven insights to create value for them. Seibert said Bridgestone approaches this with intelligent products, integrated technologies, and best-in-class services delivered by its dealer network. The goal is to provide “the lowest total cost of ownership for the end user.”
Seibert promoted his company’s PressureStat tire pressure monitoring system for OTR tires that links to its TreadStat tire management software. The system is designed to eliminate conventional pressure checks and increase efficiency.
In terms of products, Seibert said the company launched 14 new Firestone VersaBuilt radials during 2017.
Shawn Rasey, director of global business development, earthmover, Continental Tire the Americas LLC. Rasey expressed a more “cautiously optimistic” viewpoint about current market conditions. He said they’ve seen good indicators, but also viewed down trends. “Generally speaking, we’re in a better place than we’ve been for a few years, and that’s all good news.”
He reported that some of the increased demand is coming from the fact equipment is finally being replaced. Mining is recovering worldwide, and Rasey said the passage of an infrastructure bill is very important for the overall health of the industry.
Continental has launched numerous new tires across the board over the last two-and-a-half years, with more to come in 2018. Rasey said these new products should help spell relief from the current shortages that are being experienced.
As it relates to its tire lineup, Rasey was blunt. “The introduction of so many new products across multiple factories and bringing those to market in a time line we want to hit is probably one of the biggest challenges we have. We’ve made a lot of progress, but have a long way to go.”
Rasey said Continental is releasing its ContiPressureCheck system this year. This system is integrated into the company’s ContiConnect system that also includes a ContiYard reader.
Jimmy McDonnell, vice president of sales and marketing, Maxam Tire North America Inc. McDonnell prefaced his remarks by stating that Maxam was the new kid on the block, having incorporated in North America in 2015. He said his company views the industry in a positive light for all segments, including mining.
Maxam is focusing on expanding its existing OTR products in L5 and L2, but is also bringing in a new bias line for some segments this year. McDonnell said the company is focused on giant OTR tires, up to 63 inches. Another initiative right now for Maxam is getting OE fitments.
The company is now in its fourth expansion of its three-year-old Vietnam factory. “Our biggest challenge right now is managing our growth,” he said.
Andrew Davis, regional sales manager Americas, Nokian Heavy Tyres Division, Nokian Tyres plc. While echoing the positive comments by other members of the panel about the industry, Davis concentrated on the current growth going on in the forestry industry. He said new equipment has been bought, which has increased Nokian’s OE business. Even with U.S. tariffs on Canadian lumber, the demand has “been pretty strong in some of our core markets in Canada.
“We’ve seen strong growth in the agricultural sector in North America and globally,” said Davis. The company has added 22.5-inch and 30.5-inch diameter sizes to its line of flotation tires. New sizes are also coming out for the company’s Hakkapeliitta TRI products in 2018.
While known as a forestry tire manufacturer, Nokian had higher sales in agricultural tires than forestry tires in North America last year, he said. The company has invested to increase its total production by 15% this year, with plans to grow production another 50% in “the next few years.” Ground breaking has already taken place on the company’s new factory in Tennessee.
Manny Cicero, CEO of Triangle Tire USA. Triangle Tire USA was created slightly over two years ago in order to grow the Triangle brand in a systematic fashion, said Cicero. The company has secured OE fitments with Caterpillar, Doosan and Hyundai, and has “committed to investing in U.S. production, first in passenger, light truck and then commercial products.”
Cicero said he is very bullish on the market right now, having attended a Caterpillar global supplier summit in December 2017 in which “the message was singular. It was ramp-up as fast as you can. Caterpillar sees demand in heavy equipment throughout the world.” He also joked that another “unscientific” positive indicator was that one of his long-time customers actually smiled at the conference.
Triangle has 14 new products coming out in 2018, with eight new radials in the 25-inch and 35-inch categories. The company is also entering the port and container segments, but that won’t start until 2019.
Cicero also stated that treating the tire as an integrated part of the whole vehicle system is a major initiative with his company’s R&D people. “We need to make our tires a lot smarter than they are today.”
Bruce Besancon, vice president of OTR tire sales, Yokohama Tire Corp. Yokohama began to see the industry trend upward mid-way in 2017, with a heavy increase particularly in the port and rail modal segments, said Besancon.
As the U.S. becomes not just an importer of products, but also an exporter of products, Besancon said he sees intermodal increasing at a very rapid pace. “It’s taking off.” Another segment with potential for 6% to 8% growth is construction, with mining also seeing a strong increase.
Yokohama is launching 11 products during 2018, including a 35/65-33 radial and new scraper tires sizes. The company is also expanding its bias tire line offerings.
Besancon said Yokohama continues to ramp-up its production at its Mississippi truck tire plant, but pointed out the company expanded its facilities in India in 2017. He said they would also be bringing in product from Aichi Tire Industry Co. Ltd., a solid industrial tire manufacturer that Yokohama purchased almost two years ago. ■
1 Question, 7 Answers: Panelists Have Plenty of Advice for OTR Tire Dealers
”Other than buying tires from each of your companies, what’s the most important thing OTR tire dealers can do to remain successful in the highly competitive marketplace?”
Bruce Besancon, Yokohama Tire Corp.: The one thing is the dealers need to be the expert in the field. That’s what you do the best. And make sure you’re doing it safely, efficiently, and that you’re showing yourself as the true professional that you are.
Manny Cicero, Triangle Tire USA: Every time we have these discussions it boils down to the word “service.” That hasn’t gone out of play, but like I said earlier, I think it’s service to a different level. It’s not just selling a tire. It’s understanding how the tire works with the whole equipment and making a holistic solution and understanding the interconnectivity. That’s becoming a challenge for the manufacturer and the dealer.
Andrew Davis, Nokian Tyres plc.: One of the things we see to be successful in this industry is to understand that the types of equipment are changing, and the way they get used is changing rapidly, and will continue to do so in our estimation. So understanding the change and the demands of the tires and applications they’re using will be critical to provide the best value proposition to your customers.
Gary Pompo, BKT USA Inc.: Listen to what your customers are saying. They’re going to tell you what they need. If you don’t listen to what they say, they’re going to find somebody else. The best thing is to listen to what they’re saying, provide great quality product, and give them what they need in the safest way possible.
Shawn Rasey, Continental Tire the Americas LLC.: I think to sum it all up, investment. We’ve talked before about investing in training and in your equipment and most of all your people, but I would add one more thing — investing in assessing your options as you go forward, in terms of who you partner with, how and why, and what those relationships mean. That’s a really key part of your business success for the long term.
Rob Seibert, Bridgestone Americas Inc.: I would say it’s critical to embed yourself in your customers’ operations. Not just embed yourself with physical service, but with technology and finding ways to make not just their tire program but their operations more efficient.
Jimmy McDonnell, Maxam Tire North America Inc.: I think it’s about delivering increased value to your customer consistently. It’s about controlling their cost or reducing their operational expense. We’re obviously dealing with commercial customers who are trying to provide a return for their stakeholders. We need to provide the best products and services to them to enable that to happen.
Lack of OTR Tire Recycling: A Lot More Can be Done, Says Gust
While recycling seems almost second nature to the retail passenger and light truck tire market and the medium truck tire segment, it’s still not prevalent in the OTR market.
Speaking at the 2018 TIA OTR Conference, Dick Gust, president of National Accounts for Liberty Tire Recycling LLC, cited a statistic from Canada that OTR tires make up 15% of that country’s tire volume by weight. Yet many of those tires are still being left behind “in the bottom of mines.”
Gust pointed out that while various processes are now available to recycle OTR tires, the industry has been very slow to move forward with recycling. Citing information from Titan Tire Reclamation Corp., Gust said a 59.00R63 mining tire processed at that company’s thermal vacuum processing plant in Alberta, Canada, can produce 500 gallons of renewable blend oil; 4,000 pounds of carbon black; 2,000 pounds of steel; and 3,267,333 cu. ft. of synthetic gas (which provides the energy to run the plant).
When asked after the presentation what percent of OTR tires are being recycled in the U.S., Gust said he did not have the exact number, but he believed it was a very small percentage. His concern is that if the industry does not move forward with programs, there could be government intervention mandating such action.