Galaxy Tire & Wheel Inc. has signed a five-year, $27.5 million off-take tire production and technology sharing agreement with Krusevac, Yugoslavia-based Trayal Corp.

Trayal will manufacture Galaxy and Constellation brand skid steer and industrial tires as part of the deal and will work with Galaxy to jointly develop a line of radial off-road tires for intermodal use.

The tires will replace Galaxy's current line of ML-1 and ML-4 port tires and will directly compete with Michelin's X-Mine D2 and XZM tires, according to Galaxy officials.

Galaxy and Trayal also plan to jointly develop a line of radial trailer tires. The first sizes to be produced, 215/75R17.5 and 235/75x17.5, will be available in 2003.

Trayal produces passenger, light truck, medium truck and industrial tires for domestic use and import.

Galaxy has been working with Trayal since 1996.