Marangoni Group plans to meet global market evolution head-on

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The Marangoni Group has started a process to change its strategies and organizational structure to coincide with "the phase of significant change and transformation" going on in the global tire industry.

Against "an international background of continuous evolution, not only from the geopolitical point of view but also in terms of competition," Massimo De Alessandri, CEO of Marangoni SpA, recently talked about the Verona, Italy-based company's change of direction.

"It is common opinion that the new markets, especially China, are strongly influencing the rubber industry," he said. "In the tire segment, on one hand, systems with a significant production capacity have been developed to respond to the general growth in consumption, while on the other the demand for tires has not yet reached the forecast levels, and consequently there is a surplus in production that is then dumped onto other markets.

"The exponential growth of emerging countries is creating strong demand for the raw materials and the oil required to satisfy the energy needs of the new factories. This has meant increases in the prices of both.

"In the current situation, tire manufacturers have potential new markets for their products, yet at the same time, and depending on the specific case, have potential new competitors or partners."

The consequences of all these changes will be completely different in advanced and emerging markets, according to De Alessandri. "In the latter, we are seeing further consolidation of the industries with vertical integration, however with an increasing number of standards to comply with.

"In emerging markets, and in particular in the BRIC area (Brazil-Russia–India–China), there will be rapid and considerable growth in the retreading sector, while the situation regarding new tires will vary considerably according to the level of competition and local technical needs."

Marangoni also plans to invest in passenger tire production "to respond to the changing competitive scenario," he said. "In particular, this regards the new automated production island that we are testing, with the aim of ensuring the maximum quality of our tires, together with maximum manufacturing flexibility. And then, being European manufacturers, we will focus even more on our range of high and ultra-high performance tires, as well as winter tires."

In its core business, the Group is preparing to strengthen its commitment in the retreading sector, where it has been operating successfully for more than 50 years.

The reorganization also includes the exploiting and opening of new markets for industrial tire production, such as investing in a new plant in Sri Lanka, and looking at a change in approach to the way it distributes finished products to the end user. (Marangoni has a network of more than 50 sales outlets in northeast Italy.)

"We must exploit our expertise in this field, evolving from the supply of individual components (i.e., machinery, precured treads, tires) to the development of made-to-measure systems and solutions," said De Alessandri. "The most important aspect in pursuing these changes will be represented by the evolution of the Group's organizational model, from an approach that has traditionally been decentralized and focused on individual products to a system that is more oriented towards serving the different segments of customers through better integration of our processes and our expertise."

The Marangoni Group employs more than 1,800 people in 10 manufacturing sites in Italy, Germany, North America and Brazil. In 2006, the company posted consolidated sales of close to 340 million euro, which represented a growth of 10% over the previous financial year.

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