LAS VEGAS (Feb. 5, 2014) — Alliance Tire Group is entering what it calls its "third phase" of growth since the Mahansaria family took control of the farm and OTR tire maker in 2007.
That's happening with the benefit of new capital and the promise of increased product supply from a new plant the company has under construction in India.
To help drive sales in North America, Alliance Tire Americas Inc. has developed a dealer support program that will provide retailers of the firm's products with marketing support and training, according to Barry Clifford, marketing programs and communication manager.
Alliance gave dealers attending its fall 2013 Distributor Partner Conference in Boston a preview of the program, which will be administered by the company's key distributors. The program will roll out more broadly throughout 2014.
Eventually, Mr. Clifford said, Alliance plans to have the training modules available as mobile apps.
Following Alliance's acquisition in 2010 of certain Galaxy Tire assets — including the Galaxy and Primex brands — Alliance has been developing its so-called GAP brand (Galaxy/Alliance/Primex) strategy to highlight the revamped company's strengths in agricultural, foresty and construction tires. In addition, Alliance is the U.S. distributor of the Aeolus truck tire brand, one of the assets accrued in the Galaxy Tire deal.
Alliance, with the backing of new majority owner Kohlberg Kravis Roberts & Co. (KKR), is formulating plans to increase manufacturing capacity at its plants in India and Israel, according to Manny Cicero, president of Alliance Tire Americas.
New York-based KKR bought out Warburg Pincus' share of Alliance last year for a reported $500 million. Alliance CEO Yogesh Mahansaria retained a minority share.
To prepare for growth, Alliance is building a second plant in India — in Dahej in the western state of Gujarat — with an estimated 50,000 metric tons of annual capacity, and expanding capacity at the plant in Tirunelveli, India, nearly 30 percent to 84,000 tons of radial and bias-ply ag and construction tires and bias OTR and forestry tires.
In January of last year, Alliance broke ground on the $160 million project in Gujarat. Trial production should begin later this year, the company said. The plant will have a mix of radial agricultural and construction tires, including some all-steel designs.
Capacity at the existing Indian plant in Tirunelveli, which began production in 2009, is being expanded nearly 30 percent by the end of the first quarter to 84,000 tons annually, Alliance said. It produces radial tires for the ag and construction segments, as well as bias tires for ag, construction, OTR and forestry.
At the Boston dealer conference, Mr. Cicero told distributors and dealers that KKR has a "proven track record of helping companies thrive. Their business expertise, resources and commitment will play a significant role in helping us achieve our growth goals."
In North America—which accounts for roughly 40 to 45 percent of Alliance's global sales of $550 million—the company is planning a push in flotation tires in 2014 along with a more aggressive stance toward OE, Mr. Clifford said.
ATG's sales globally have more than doubled in the past five years, and the company expects revenue to double again in the coming five years to more than $1 billion.
On the OE side, Alliance has supply approvals from global and regional farm equipment makers such as AGCO, John Deere, Case New Holland, Bobcat, Caterpillar, Hitachi, Komatsu, Volvo, Krammer, Claas, Hydrema, Liebherr, Fliegl, Amazone, etc.
In North America, Alliance has consolidated its executive team at Galaxy's former headquarters in Wakefield, Mass., and built a team of industry veterans from both the Alliance and Galaxy sides.
Those execs include: Michael Aguon, national product manager, agricultural tires; Bob Arnold, vice president, aftermarket sales, concentrating on skid steer, construction and industrial tires; Seth Walters, vice president of operations, overseeing supply chain, customer service and sales support; Terry Goodwin, forestry tire manager, Alliance and Primex brands; Domenic Mazzola, vice president of OE engineering and sales; Dhaval Nanvati, chief of sales and business development; and John Hull, national truck tire sales manager, overseeing the Aeolus tire marketing program.
Alliance broadened the team in recent weeks with the hiring of former Michelin North America Inc. executive Bruce Besancon as its vice president of marketing. Mr. Besancon brings more than 20 years of experience at Michelin to Alliance, where he will be responsible for developing strategies to drive awareness and acceptance of the company's GAP brands.
They are backed by George Ronai, head of research and development for the parent company.
Alliance serves customers in the U.S. through three warehouse distribution centers. In Canada, Dynamic Tire controls distribution of the Galaxy and Primex brands, and in Latin America, Alliance struck a deal in 2012 with Tire Group International L.L.C. to handle the Galaxy farm, industrial and OTR lines for all of Central and South America and the Caribbean except Colombia and Ecuador.
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With one-third of 2018 in the books, how would you characterize business thus far?
|Sales are behind where we were last year at this point.||
29% (36 votes)
|Our sales are about the same as last year.||
20% (25 votes)
|The first four months have been extremely strong; let's hope we can maintain it.||
33% (41 votes)
|One month up, one month down ...||
18% (22 votes)
|Total votes: 124|