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Massive investment

We’re doing our best to build giant OTR tires.” Those words from Abraham Hengyucius, president of Chino, Calif.-based American Tire Corp. (ATC), echoed the messages delivered by other tire manufacturers at the 2008 Tire Industry Association Off-the-Road Tire Conference, which was held in late February in Kohala Coast, Hawaii.

OTR tire suppliers used the event as a forum to share their plans for investing in further OTR tire production. Here’s what executives from each of the major OTR tire manufacturers had to say during a panel discussion moderated by Modern Tire Dealer Publisher Greg Smith:

• Bridgestone/Firestone North American Tire LLC (BFNT) received approval from parent company Bridgestone Corp. last year to invest $315 million in large OTR tire production, said Shawn Rasey, executive director of Off Road Tires, Bridgestone Firestone Off-Road Tire Co.

“The second half of 2010 through the second half of 2012 will be the ramp-up period for this expansion,” which will represent a 26% increase from Bridgestone’s rubber output baseline in 2005.

Rasey noted BFNT also is investing at least $12 million over the next five years in its Bloomington, Ill., OTR tire plant. “We’ve already started that process and it will be completed by the second half of 2009. Our loader tire capacity will effectively double.”

Rasey also provided updates on other OTR production initiatives at Bridgestone.

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An investment of $155 million at the company’s OTR tire plant in Shiminoseki, Japan, “is now being completed.”

• Goodyear Tire & Rubber Co.’s OTR tire plants are running seven days a week, said Ryan Waldron, general manager, global off-the-road tires, for Goodyear. (The company manufactures OTR tires in nine plants worldwide, including Japan, India, South Africa, Luxembourg and other countries.)

Waldron also noted that Goodyear has doubled tread belt production capacity for its Two Piece OTR tire and will increase production capacity for its Two Piece casings between 20% and 30% in 2008. Goodyear sells the Two Piece’s tread and casings separately.

“We continue to look at the opportunities we see in the OTR industry and continue to evaluate those.”

He noted that Goodyear OTR tire end users have been able to achieve 25% to 28% improvement in the tires’ productivity and performance by working closely with the Akron, Ohio-based company’s network of OTR tire dealers.

• Michelin North America Inc. has invested $85 million in its Lexington, S.C., OTR tire plant, “which is just for 51-, 57- and 63-inch tires,” said Roger Lucas, North American vice president for marketing and sales, Michelin Earthmover Tires. “The Lexington plant will provide us with about 40% greater capacity... it’s a North American initiative. We believe this will allow us to meet market demands.”

Lucas also reported that Michelin has invested $280 million in its South American OTR plant “to meet not only the South American market, but North America and Australia as well.

“This plant will be geared toward producing 25- through 49-inch tires and will provide the capacity to take pressure off our North American plant.”

Overall, Michelin’s plants “will be much more responsive to the needs of the customer from a supply standpoint,” said Lucas.

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• Titan International Inc. touted its ability to build 63-inch tires. “We’ll have the capacity to produce 15,000 63-inch tires, but the market doesn’t really need that many, so we’re going to drop it down,” said Titan Chairman and CEO Morry Taylor. Titan is looking ahead to producing a 73.5-inch tire, “and I really believe we should make an 81.5-inch.

“The biggest problem we have right now with a 73.5-inch is building the wheel (for it). I expect (81.5-inch) to be something in the future, and by the future I mean the next 18 months.”

• Yokohama Tire Corp. is running four state-of-the-art building machines at its new plant in Onomichi, Japan; six will be in operation “in the near future,” according to Nelson Richards, Yokohama’s national sales manager.

“We have 14 curing machines. Overall we’re probably looking at $135 million in expansions within a three-year period of time.”

Sixty-three-inch tires “have been all the buzz,” Richards noted, “but our emphasis has always been on construction sizes.” However, the company is “looking at doing giant radial tires in the future.”

In addition, Yokohama is developing a bias-ply tire for Toronto, Ontario-based Barrick Gold Corp.

ATC, which says it has finalized plans for an OTR tire production facility in Washington state, “currently produces both radial and bias tires,” said Hengyucius. He said ATC is targeting production of 4,000 OTR tires in 2008 and hopes to build 5,000 units next year.

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Shortage over soon?

Titan’s Taylor delivered the keynote presentation at the event. He predicted the current giant OTR shortage will end as early as the first quarter of 2009. “I believe this shortage is going to go away,” he told attendees.

He discussed why Titan decided to get into 63-inch tire production. (The firm built its first 63-inch tire in early February.) “To make money, you have to make changes. The way to do that is to innovate, and I think we proved that by doing the 63-inch.

“If we did a 49-inch or a 57-inch, my friends at Bridgestone and Michelin would have said, ‘They can’t do 63 inches.’ Well, we’re going to have a 73.5-inch!”

Taylor played up Titan’s ability to test its giant OTR tires by using a 24-foot test wheel. “All of our tires are made to be retreaded.”

Also during the conference, Asian OTR tire manufacturer Techking Tires Ltd. provided a rare look at OTR tire production in China.

According to James Wang, Techking overseas marketing manager, slightly more than two million OTR tires were produced in China during 2007, nearly double the amount of OTR tires made in China during 2003.

Slightly more than 92% of OTR tires made in China last year were bias, said Wang, while 7.9% were radial.

Techking also provided a look at market share percentages for Chinese radial OTR tire manufacturers.

Triangle Tire and Double Coin Holdings Ltd. each have 31.6% share of the radial OTR tire market in China, according to Techking’s estimates. Meanwhile, Techking has 21.1% of the radial market, leaving the remaining part of the market to other companies that Wang did not identify.

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