FAIRFAX, Va.-A year from now, the retail tire landscape could look dramatically different if-and it's a very big ``if''-the ambitious plans of an as-yet-confidential group of investors come to pass. Figuratively, the machinery is already in motion for what they hope will be a successful venture to make and market bead-to-bead remanufactured tires. That's something several companies have tried in re-cent years with limited degrees of success.
While saying it was premature to discuss the full scope of the project, including many details that are yet to be determined, attorney Christopher L. Davis agreed to sketch out for TIRE BUSINESS what he called an ``exciting'' enterprise that could result in the resurgence of passenger tire retreading.
In his capacity as president of the Fairfax-based Investment Program Association (IPA), Mr. Davis said he saw an opportunity worth exploring and set out with an IPA member to secure financing.
The IPA is a 10-year-old national trade association that raises a ``considerable amount'' of capital, primarily for real estate, equipment leasing and communications ventures, he said.
IPA members finance ``nearly any kind of enterprise, but it generally has to be larger than $50 million,'' Mr. Davis said.
``Our work is for advocacy on securities and tax issues,'' he said, quickly adding: ``But my selfish interest in building a bead-to-bead operation is something I do in my spare time when I'm not running this trade association.''
The unnamed tire retreading corporation will be based in northern Virginia and is looking primarily in the greater Washington, D.C., area for a site for its first manufacturing plant.
But Mr. Davis said sites in Maryland, Pennsylvania and downstate Virginia also are under consideration.
``Optimistically,'' the plant would begin production by the first quarter of 1996.
At least one additional plant could eventually be built, either on the East Coast or possibly on the West Coast-if the tires succeed in the marketplace.
Setting its sights on a ``clearly ambitious'' schedule, the company would, within 18 months after start-up, be turning out between 1,000 and 3,000 remanufactured passenger tires daily. Mr. Davis said it would probably also produce light truck tires.
Guarded in his comments about any specifics, he did say a sales and marketing team is already in place for the would-be retreader, and senior management candidates are under consideration.
Mr. Davis, who has pursued the project for two years, won't be leaving the IPA, but will work in some capacity for the new firm, which will not be affiliated with the trade association.
He expects financing to be pulled together in the next 90 days through institutional and a ``small syndicate of wealthy individual'' investors.
``Part of this initiative is a partnership of some industry leaders,'' including ``a major player,'' Mr. Davis said. Initially, the plant will operate with used Marangoni retreading equipment.
Because passenger tire retreading has been on a downward slope for several years, he reasoned, the time was ripe ``to move on an opportunity. . . .
``We think we can develop the market. The less-than-handful of companies that are in this area (of retreading) have the potential, whether they know how to exploit it, whether they're able to have enough capital for more economies of scale.''
The new firm's investors believe there will be a market in the U.S. and worldwide for ``top-quality remanufactured tires,'' he said, noting the success in Europe is encouraging.
The bottom line, he continued, is that ``the ability to identify this area for opportunity and to exploit it is largely going to turn around management skill and access to capital-and we have both.''
Going head-to-head with low-cost new tires, while a problem, is not insurmountable, he said.
Also, Mr. Davis said the company ``will have access to an enormous casing supply. . . for other applications,'' with tire remolding only one component of the new business.
The new firm has some customer commitments, Mr. Davis said, though he would not disclose any.
He would only say ``they're already moving other people's remanufactured bead-to-bead tires-and it's not Achievor Tire L.P. These are major players that are doing a good job right now.''