Produce or lose
Fill rates are not overrated. That seemed to be the overriding attitude of not only executives from Double Coin Holdings Ltd., but also tire dealers in Shanghai, China, recently.
Double Coin is based in Shanghai. It has been promoting its namesake truck and small OTR tires aggressively in the United States for the last five years.
The company opened its second radial commercial tire plant in Rugao in 2005, and a third in Chong Qing in 2008. Two years ago, it announced plans to build large radial OTR tires at its Shanghai truck tire facility.
Double Coin’s replacement truck tire market share in the U.S. is 2%, according to Modern Tire Dealer statistics. It also has an original equipment contract.
In the off-the-road segment, it is field-testing giant OTR tires and agricultural tires on American soil.
To show some of its customers its production capability from the inside out, China Manufacturers Alliance LLC (CMA), Double Coin’s United States-based marketing arm, invited them to Shanghai to visit the Rugao and Shanghai facilities.
Truck tire production capacity
“How many tires can your three plants produce?” asked Ricky Benton Sr., president of Black's Tire Service, a retail and wholesale chain based in Whiteville, N.C., on the bus from Shanghai Pudong International Airport to the hotel. (Double Coin is just one of the brands Black’s Tire Service offers.)
CMA Vice President Aaron Murphy estimated Double Coin’s truck tire capacity at the three plants will be between 6.5 million and 7 million tires in 2011.
According to Dean Jin, vice manager of Double Coin’s international trade department, 30% of the company’s truck tire production is exported. He estimates 35% of that (close to 600,000 Double Coin and Dynatrac tires) goes to its largest import partner, the U.S. Imports are up this year, he added.
All three Double Coin plants meet ISO (International Organization for Standardization) standards for quality management and original equipment production. They run three shifts a day, 340 to 342 days a year.
Rugao plant: 2,500 employees
Capacity at the five-year-old Rugao facility is 2.5 million truck tires and 100,000 small OTR tires (25- to 35-inch rim diameters) annually. However, by the end of the year, truck tire capacity will reach 2.8 million tires. Kiko Jing, steel cord and tire design manager, said the plant is running at full capacity.
In addition, the plant will manufacture 20,000 rear radial farm tires. "We're ready to go," said CMA Vice President Walt Weller. "We're just waiting for the results of the field testing."
The farm tire line initially will be available in three sizes: 5.20/85R42, 4.20/85R28 and 4.60/85R42. Five more sizes will be added by the end of the year: 4.60/85R42, 4.60/85R46, 4.20/85R30, 4.20/85R34 and 5.20/85R38.
In all, the plant features 37 building machines -- 26 two-drum, seven three-drum and, for OTR tire production, four four-drum.
Rugao is more automated than the Shanghai plant and three times its size. It is not as automated as the new Chong Qing facility.
Shanghai plant: 2,800 employees
Capacity at the 22-year-old Shanghai facility is 2.8 million radial truck and bus tires a year. The most recent addition to the plant is a $200 million giant OTR tire manufacturing section that used to be a warehouse. Two sizes, 27.00R49 and 37.00R57, will be available soon. If field-testing in the U.S. goes well, the company will look at producing 51- and 63-inch sizes, said Jing. “It depends on the feedback.”
“The testing is going very well,” said Murphy. “The wear rates are equaling those from some of the major manufacturers.” At full capacity, the Shanghai plant will be able to produce 20,000 giant OTR tires annually.
The plant features 59 building machines -- 46 two-drum, 11 three-drum and two four-drum. It also houses the research and development department. All small OTR tire endurance testing is done in Shanghai.
What’s next? Passenger tires
Rick Stewart, president of Action Tire Co. in Forest Park, Ga., was one of eight dealers invited to Shanghai. He said he checked out the Double Coin brand a few years ago, “but they didn't have production."
In the last three years, Double Coin has more than doubled radial truck tire manufacturing capacity at its Rugao plant, with more to come. And it added a third plant in 2008 (see "Plant number three" below). By next year, the company will be able to produce 6.5 million truck tires a year, plus large and small radial OTR tires and rear radial farm tires.
All that’s left is passenger tire production, which company officials insist is on the way. CMA President Mike Yang estimated it will take two or three years.
As to where the tires will be manufactured, Yang said Double Coin has a lot of options. “It depends on efficiencies.”
Jing said it won’t be in Shanghai: “No room.” ■
Plant number three
Double Coin Holdings Ltd. has three plants in China. During a recent trip to Shanghai, tire dealers visited two (see story).
The third, in Chong Qing, opened in 2008. It is located some 1,000 miles from Shanghai.
According to Double Coin, the plant has the capacity to produce 300,000 radial truck and bus tires annually. By the end of the year, however, that number will be increased to more than 900,000, said Mike Yang, president of China Manufacturers Alliance LLC, a subsidiary of Double Coin.