Five minutes with: Marangoni's Bill Sweatman

April 13, 2007

Bill Sweatman is president of Marangoni Tread North America Inc. Marangoni has 23 licensees in United States and Canada.

MTD: How's the expansion/upgrade in Madison, Tenn., coming along?

Bill: It's going well. We've been able to make some incremental improvements: ship some molds, add some capacity... This was kicked off by making the decision last fall to purchase the property.

We purchased this 100,000-square foot building and 13 acres of undeveloped property next to us for future expansion. We have some things on the drawing board and have made some internal improvements. And there's more to announce later.

MTD: How many licensees do you want to add in 2007?

Bill: We're looking at four to five over the next 12 months. This last year, we had a couple of existing licensees add facilities and put in new plants, and now we're looking at some competitive conversion opportunities.

MTD: If it goes through, how will Bridgestone Americas Holding Inc.'s purchase of Bandag Inc. affect Marangoni?

Bill: It's hard to say at this point in time because so much remains to be seen. On one hand we see that it's healthy for the industry to have a major tire manufacturer to commit that kind of investment to retreads.

As it relates to how it's going to impact the independent tire dealer is where we come into play. Once this acquisition is completed, we'll be the only tread manufacturer in the U.S. that's not owned by a tire company. We are committed to supporting independent tire dealers and not competing against them with company-owned stores. We're committed to their growth and profitability.

We think it will open up some real opportunities with dealers who are looking at their options and want to remain independent. In order for them to remain independent, we're going to present ourselves as a very good choice.

MTD: Do you expect to pick up former Bandag retreaders?

Bill: There are a number of dealers out there who are looking at what life may look like after this acquisition is complete. For some, I'm sure it's going to fit very well and they will be very pleased; other guys will be somewhat conflicted and will look for alternatives.

MTD: Retreads have always been presented as high-quality yet lower-cost alternatives to new truck tires. Has the influx of low-cost Chinese truck tires into the North American market had an effect on Marangoni's pricing and market position?

Bill: Only to the effect that in cap and casing sales... that product really competes with alternative, Chinese-brand tires. The casings are still being retreaded, but there are not so many being retreaded and then sold as a unit.

The fact that we're a little different than the conventional retread product helps us maintain our growth. Certainly, the low acquisition price that a fleet can obtain a Chinese tire for impacts retreadability of those casings and where the products hopefully go.