Trelleborg’s New Factory ‘Opens the Door’ to North America’s Ag Market
Trelleborg AB chose Spartanburg, S.C., as the site of its first North American facility devoted to making premium radial agricultural tires. The company officially dedicated the 430,000-square-foot facility on Jan. 27, 2016.
“This facility creates a growth platform for us in the U.S. to improve the services to our customers. It opens the door to the largest agriculture market in the world, North America, from coast to coast,” Ulf Berghult, chief financial officer of Trelleborg AB, told original equipment manufacturers, tire dealers and media attending the event.
Radialization is growing in the North American market, according to Paolo Pompei, president of agricultural and forestry tires at Trelleborg Wheel Systems SpA. “There’s still plenty of room for development. We cannot be absent from a key market in the world.”
Trelleborg says the plant is the most automated in the entire ag tire industry. Bruce Proctor’s sole purpose for coming to the grand opening was to see the automation.
“It’s just unbelievable, the quality the automation brings,” said Proctor, who has 51 years of experience in the ag industry. “I expected to see automation, but not to the extent it exists here. Automation eliminates a lot of labor issues and environmental issues, and it certainly enhances the quality.”
Proctor has worked the last 24 years with Bobby Henard Inc., which does business as Bobby Henard Tire Service. The dealership has more than 4,000 new and used rear farm tires in its inventory. Also in stock are new and used tractor and combine wheels and ag tracks. In addition, the dealership sells and services medium truck tires, forklift tires, skid steer, backhoe and other construction tires, passenger, and light truck tires from two outlets in Brinkley, Ark., and Indianola, Miss.
Radial ag tires in sizes ranging from 24- to 54-inch rim diameters for both the OE and replacement markets will be produced at the plant, which represents a $50 million investment. More tire building equipment will be installed over the next two years. Production of bias-ply forestry tires will be added by 2018. The company plans to add capacity in a second expansion phase planned for 2018 to 2022.
“North America is the largest agricultural market in the world,” said Pompei. “Demand for extra-large agricultural tires, where Trelleborg is a market leader, is growing in the region. Although we already sell our products in the U.S. and Canada, local production offers considerably more favorable conditions, thus enhancing our competitiveness.”
Trelleborg customers can schedule factory visits to see the Spartanburg facility. The company plans more outreach to customers as part of a sales and marketing program in North America. The goal is not to just make customers aware of the brand, but to make them aware of the value behind the brand, Pompei told Modern Tire Dealer.
“This is an industry where customers want to see and experience the value of Trelleborg. So there will be a lot in terms of meeting customers, talking to them, doing field demonstrations, and giving customers the ability to measure the difference and the value of Trelleborg versus our competitors.”
Trelleborg and Mitas
Sweden-based Trelleborg AB reported revenues of $2.4 billion in 2014. North America accounted for about 30%, or $730 million, of the company’s total sales. The Trelleborg Wheel Systems division generated $606 million in sales of industrial, agricultural, and forestry tires worldwide. The North American market represented 24%, or $145.5 million, of the wheel division’s global sales.
Trelleborg has 19 manufacturing facilities in North America in different industries and employs more than 2,500 people in the U.S. The company said the Spartanburg plant will strengthen its global position in the agriculture industry.
Trelleborg AB purchased CGS Holding a.s., the parent firm of Mitas a.s., for $1.2 billion. Trelleborg Wheel Systems’ revenues will almost double as a result of the acquisition.
When the deal is finalized in a few months, Trelleborg also will own the Mitas agricultural tire plant in Charles City, Iowa. Trelleborg is marketed as a premium brand, while Mitas is a mid-market brand, according to Pompei.
“We are complementary when we talk about market coverage. It’s not a segment in terms of application; it’s a segment in term of positioning. We are positioned at completely different levels of products that are covering different market needs.” ■