AKRON-Two of the top three solid tire makers in North America plan to increase prices in the near future, primarily blaming sharp hikes in natural rubber (NR) costs. It was unclear whether other industrial tire makers would follow suit.
Canada's Industrial Tires Ltd. plans to increase prices 6 percent on all of its products, effective Jan. 3.
ITL's letter to its dealers and distributors, dated Nov. 22, outlined a 66-percent jump in NR prices during the past year, along with a 16-percent rise in the cost of steel and increases in such overhead items as energy costs.
A chart accompanying the letter indicated NR prices were 41 cents a pound in mid-October 1993 and had jumped to 68 cents a pound a year later.
``The NR rise has been so enormous, it's been unabsorbable,'' ITL Vice Chairman Bob Pilmer said.
Maine Rubber International intends to hike its prices a weighted average of about 7 percent, according to Executive Vice President Richard Morrison.
Besides the rise in NR prices, the cost of polyurethane chemicals also grew, so Maine Rubber also will raise prices on its line of polyurethane tires, he said.
Messrs. Pilmer and Morrison said 1994 has been excellent from a sales standpoint, but the raw materials costs have eaten away at profits.
``We're having our best year, but it would certainly have been more fun (without the increases),'' Mr. Morrison said. He noted that brokers foresee no drop in NR prices in the near future.
ITL's letter blamed several factors for the NR price situation, including increased demand worldwide and adverse weather conditions in Southeast Asia that affected production.
Higher performance requirements for solid tires-such as lower rolling resistance, longer service and more comfortable ride-mean the manufacturers can no longer easily substitute low-cost materials without hurting these characteristics, ITL said.
``Before, everyone had a synthetic rubber and a natural rubber compound, and they'd just choose the one that was cheaper that month,'' Mr. Pilmer said. ``Now we've built ourselves into a structure of quality that was not there 20 years ago.''
The other top solid tire maker in North America-Monarch Industrial Tire Co.-did not return phone calls by presstime. One industry source, however, said Monarch had raised prices in September, following increases in April by ITL and Maine.
Mitchell Industrial Tire Co., the distant No. 4 solid tire maker in North America, has not decided whether to increase prices, according to President Benton Hood.
These four firms control 70 to 80 percent of the business in North America. Some smaller manufacturers and importers serve niche areas of the market.