Purcell will transfer OTR retread production to home base

June 10, 2009

Purcell Tire & Rubber Co. is transferring production from two recently acquired OTR tire retread plants in Minnesota and North Carolina to its main OTR retread facility in Potosi, Mo., the dealership's hometown.

The move will increase the Potosi plant's production capacity from its current level of around 65%, says Bob Purcell, Purcell Tire chairman.

Purcell Tire purchased the OTR plants -- one in Winona, Minn., and the other in Salisbury, N.C. -- from Goodyear Tire & Rubber Co. in early May. The plants have since been shut down. Combined, they produced 40 OTR retreads per day.

Purcell Tire, the second largest retreader in the United States, is searching for buyers for the plants "or pieces" of the plants, says Purcell. "We've had some people come and look at them."

The dealership has "a lot" of dormant capacity in Potosi, he explains. The production transfer "will bump up our production numbers considerably."

The idea to buy the plants came out of a meeting with Goodyear. "Goodyear has been saying that its intention is to take care of its core business. I don't think they've ever considered this their core business. As far as I can see, it's a good thing for us because we were larger than they were, and to add that in" will be a benefit.

"Instead of having 65% capacity, we're moving closer to 100% capacity, so that makes a big difference in profitability."

Purcell adds that his company does not have any other OTR-related acquisitions in the works at the moment. "We're covered up with this project -- trying to get it cleaned up. Something might pop up, but right now we don't have any plans for acquisitions or anything in the earthmover tire retread area. We want to get this one handled and running smoothly."