AKRON—It's been, arguably, the most eventful year in retreading in recent memory. Consider that:
At least a dozen Bandag franchisees—representing nearly 5,000 units of daily production capacity—switched systems;
Michelin Retread Technologies Inc. has built a network of nearly 30 retread plants, representing an estimated 5,500-6,000 units of daily output, in less than 18 months;
Five of the nation's leading retreaders of passenger car tires pulled the plug on their operations;
Demand for truck tires continues strong, pushing sales of new and retreaded truck tires, along with imports, to all-time records in 1998.
While consolidation among commercial tire retreaders hasn't been as dramatic as that among retail tire dealerships, the trend is undeniably there. About a third of the retreaders listed in this year's Tire Business rankings grew by some sort of acquisition.
Individually, Goodyear's consolidation of Brad Ragan Inc. solidified its position as the No. 1 retreader in three of the four categories tracked: medium truck, light truck and off-the-road. Goodyear also is the single largest user of tread rubber, consuming nearly 52 million pounds last year, or more than twice as much as No. 2 Tire Distribution Systems Inc.
When added together, Bridgestone Firestone Inc.'s various retreading companies—Cobre Tire, GCR Truck Centers, Oncor and its Canadian subsidiary—consumed more than 17 million pounds of tread rubber, good for the No. 3 spot ahead of Treadco Inc. and Tire Centers Inc. (See the tables on pages 12 and 13 for details.)
Total tread rubber consumption in the U.S. grew about 1.5 percent last year to nearly 613 million pounds, as declines in passenger and light truck tire retreading largely offset gains in the medium truck tire category, according to data from the International Tire and Rubber Association (ITRA).
There are more than 50 truck tire retreaders in the U.S. and Canada that process a million pounds or more of tread rubber annually, according to the data collected for this year's rankings.
The 45 largest commercial tire retreaders ranked operate 335 retreading plants, and produce a combined daily output of more than 37,750 units, or annual output of about 9.5 million units. This represents approximately half the North American production of 18 million to 19 million truck tire retreads.
Based on these figures, the average-size retread plant of the 45 largest retreaders in North America puts out 112 tires a day.
ITRA estimates there are 1,200 retread plants in the U.S. producing commercial tire retreads, and there are an estimated 50 to 60 commercial tire retread plants in Canada. Subtracting out the known production of the leading retreaders leaves the average output of the 1,200 or so other truck tire retreaders at about 30 units a day.
Despite losing a dozen or so accounts in the past year and a half, Bandag Inc. still holds a commanding presence in the truck tire retreading business—30 of the top 45 commercial tire retreaders ranked were Bandag franchisees last year. The combined output of these 30 is more than 18,500 units per day (or 4.65 million tires a year).
Three of these, however—Bauer Built Inc., Ray Carr Tires Inc., and Ziegler Tire & Supply—are in the process of changing to other systems.
Five retreaders operating 47 plants use Oliver or Long Mile processes, while only three independent retreaders of the 45 ranked use Goodyear processes, in addition to Goodyear itself, which operates 68 truck tire retread plants throughout the U.S. and Canada.
Four identify Hawkinson as the source of their retread system, while two said they use Hercules.
On the passenger side, the industry lost five of its largest retreaders in the past year, as EcoTyre went out of business, and Ray Carr Tires, C&J Tire Service Inc., Retread Manufacturing & Tire Sales Inc. and White's Tire Service of Wilson Inc. all exited the car tire retreading business.
At the same time, perennial No. 1 car tire retreader Les Schwab Tire Centers has lost that distinction to Eastern Tire Service of New Glasgow, Nova Scotia, as Eastern increased its output 18 percent and Les Schwab's production dropped 44 percent. (See separate stories on the passenger tire retreading business on page 9 in this section.)
With the switch of TCI to Michelin's retreading system, Premier Bandag has advanced to become Bandag's largest independent customer, processing 6.9 million pounds of tread rubber last year, a 25-percent jump over 1997.
Premier's double-digit growth included the opening of a retread plant in Alliance, Ohio, and acquisition of one in St. Louis from MFR Tire. Overall, Premier moved to No. 7 on the Tire Business ranking, from No. 11 last year.
The biggest movers of the year were McGriff Treading Co. and Parkhouse Tire. McGriff jumped to ninth from 17th, on the strength of 64-percent growth, while Parkhouse jumped to 13th from 24th, on 72-percent growth.
Parkhouse Tire's growth was a combination of expanded production at its existing locations, and the addition of one retread plant via acquisition.
New Holland Tire's truck tire retreading output slid 20.6 percent last year, as the company shifted its emphasis slightly to the new-tire business. The company blamed the preponderance of low-priced new tires for its retreading cut-back.
Par-Troy Rubber Co. Inc.'s production also was 20 percent behind 1997, but this reflects the sale of its partially owned PTR South Inc. operation in South Carolina to that company's minority partner. As a result, Par-Troy operates only one plant now, in Orange, N.J.
Par-Troy's market is about 99-percent intermodal, a market segment that's extremely price-sensitive. As a result, intermodal retreaders are having to battle a flood of low-priced imported new tires from China, India and other Asian countries, said Bill Wise Jr., Par-Troy's vice president and secretary.
In addition to the 45 truck tire retreaders listed on pages 12-13, Tire Business has identified at least six others that process 1 million pounds or more of tread rubber a year.
The next largest are: Stringer Tire Co., Jacksonville, Fla.; Raben Tire Co. Inc., Evansville, Ind.; Cate-McLauren Co., Columbia, S.C.; Custom Bandag Inc., Linden, N.J.; Sullivan Tire Co. Inc., Lowell, Mass.; and Perdue Tire Inc., Newark, Calif.
Growth among individual retreaders included:
Royal Tire Inc. of St. Cloud, Minn., expanded its size and territory last August by acquiring Brandon Tire of Montevideo, Minn. The purchase added four commercial sales outlets and a Bandag retread plant to Royal Tire's growing presence in Minnesota. Brandon Tire owner Dennis Brandon has stayed on with Royal Tire.
Yellow Freight Systems sold 151 Tire Systems Inc. and Prestone Trucking last August to a privately held corporation. 151 has phased out intermodal business—which up until recently represented about 30 percent of the firm's wholesale revenues—and instead is redirecting its resources into radial retreading and building its own commercial tire business.
During the year, 151 added the Continental General Tire brand line to its Michelin range and started a 24-hour/day road service program. The company also added two service trucks, and next year expects to add new service locations to the two it now operates.
Cate-McLauren Co. has purchased land adjacent to its Columbia, S.C., plant and will move its commercial and office activities to the new property by early next year, making room for an expansion of retread capacity and warehousing space.
The Bandag franchisee expects to have room to add capacity for between 100 and 150 units a day to its existing 250 unit-per-day plant, a company spokesman said.
Ranger Tires in Farmingdale, N.Y., expanded its commercial and retread capacity extensively in 1998. The firm added a second retread shop and a 14,000-sq.-ft. warehouse with a capacity of 4,000 tires.
The new 10,000-sq.-ft. retread plant is producing about 75 medium truck tires a day using the Hercules precure system, Vice President John D. Roefs said. Ranger plans to boost precure retread production and increase sales in the intermodal tire market, Mr. Roefs said.
``We don't directly solicit the big container companies,'' he said, but quickly added that about 75 percent of Ranger's intermodal business is a result of an agreement with McGriff Commercial Services of Cullman, Ala.
Ranger has what he called a ``non-aggression pact'' with McGriff and provides service to the Alabama-based company's accounts along the East Coast between Virginia and the Boston area.
Mr. Roefs said the intermodal business has been steady but will really pick up later in the year when imported goods to be sold during the Christmas season start arriving at East Coast ports.
``That's when all the imports hit and everybody wants tires,'' Mr. Roefs said.
There was considerable consolidation and growth north of the border as well.
Kal Tire, Canada's largest retreader and the 10th largest in North America, added four Bandag plants to its stable of 10 in its acquisition of James Tire from Bridgestone Firestone Canada Inc. in the first quarter of 1998. Subsequently, it closed a small shop in Annacis, British Columbia.
For the year, Kal Tire increased production 15 percent on the commercial tire side.
Canadian Treads Corp., No. 32 on this year's list, opened its fifth retread plant, an Oliver Retreading System-based shop in Saskatoon, Saskatchewan, in early May. This represents a move eastward for Canadian Treads, which has two plants in Alberta and two in British Columbia.
The newest plant is set up for about 60 units a day, or slightly smaller than the company's other facilities. The plant will serve both local industry and truckers hauling freight east and west along the Yellowhead Route of the Trans-Canadian Highway.
In Ontario, Attersley Tire Service Ltd. recently took over Thames Tire Inc. of London, a purchase that included Thames' two retread plants, giving Oshawa-based Attersley four Bandag facilities and production capacity in excess of 200 to 300 tires a day.
In addition, Beverly Tire of Flamborough, Ontario, and Goodyear Canada, based in Mississauga, have entered into a cooperative arrangement that will move Beverly into the position of being Goodyear's leading retreading and commercial tire source for most of Ontario.