FLAMBOROUGH, Ontario (July 4, 2000)—Beverly Tire Group Ltd. in Flamborough and Hercules Tire Canada in Woodstock, Ontario, have formed a "strategic alliance" to sell various brands of tires to each other, thus expanding the product offerings of both firms.
The deal was announced June 27 and is limited to southern Ontario.
Under the terms of the agreement, Beverly Tire will sell Goodyear-brand passenger, light truck, farm and off-the-road tires to Hercules Tire Canada, which is owned by Findlay, Ohio-based Hercules Tire & Rubber Co.
Hercules Tire Canada, in turn, will sell Hercules and various other private-brand commercial and passenger tires to Beverly Tire.
In a press release, Beverly Tire President Bill Farmer said the agreement expands the product offerings at Beverly Tire´s locations. "It allows us to fill some void product areas and provide our customers with a more complete line of products at every price point," he said.
In January 1999, Goodyear Canada Inc. purchased 49 percent of Beverly Tire, and since then the Flamborough-based dealership has more doubled the number of its locations to 26 from 12 and switched to Goodyear´s retread system. Beverly Tire´s retread plant has an output of about 50 tires per day.
Beverly Tire projects sales of about $34.4 million (all amounts in U.S. dollars) this year.
"At Hercules Tire Canada we wanted to add a strong brand name like Goodyear to our passenger and light truck product offerings," said Rob Keller, vice president of Hercules Tire in the press release.
Hercules Tire Canada has four warehouses, three in Ontario and one in Quebec. The wholesale-only company has about 70 employees and annual sales of about $28.3 million. It supplies tires and wheels to more than 1,000 customers in eastern Canada.
The companies have been doing business with each other for 20 years, but have never signed a formal agreement until now.
"We were searching for the Goodyear brand for a long time," Mr. Keller told Tire Business. He said it made sense for the two companies to cooperate since they sell through separate channels in the same area geographic area.
Mr. Keller estimated the agreement will generate about $4.5 million in annual sales between the two companies.