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July 31, 2000 02:00 AM

Industrial tires: retread rewards

Miles Moore
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    WASHINGTON (July 27, 2000) — Industrial tire retreading is a tiny niche market compared with truck tire retreading, but it provides substantial rewards for retreaders with the discipline to pursue it, according to the main player in that business.

    "Retreaders will get at least double the margin out of retreading industrial tires that they will out of truck tires, if not more," said Richard Brahler, president of Industrial Tire Recycling (ITR) in Granite City, Ill., the nation's largest industrial tire retreader and maker of industrial tire retreading materials.

    But at the same time, they must realize that industrial tires are indeed a niche market, and that it isn't just a matter of slapping a truck tread on a forklift tire, Mr. Brahler noted.

    "You really have to be focused on that kind of customer," he said. "Retreaders may become industrial tire retreaders out of the pure need for survival in the marketplace, but they have to make a choice. They can't do it halfway."

    This doesn't mean retreaders can't retread both industrial and truck tires, Mr. Brahler said. "Most of our dealers are doing a little bit of both," he said. "They run the skid-steer and forklift tires on the second shift." But it does mean they must be committed to understanding industrial tire technology and to marketing their products to industrial users.

    There are two major types of tires in the industrial market: solid forklift tires and foam-filled pneumatic skid-steer tires.

    "Last year, the skid-steer market was probably the fastest-growing of any tire market in the U.S.," Mr. Brahler said. "Our biggest customers are the rental companies—those who are selling the equipment, but also renting it." Those customers fill the tires with foam to make them last, but then must retread them several times to get the full value out of them after filling them, he added.

    Solid forklift tires also constitute a big market, if a largely hidden one, Mr. Brahler said. "You go to a warehouse, and there are maybe 50 to 100 forklifts in constant use," he said. "But if you don't go there, you'd never see them."

    ITR has 18 affiliated dealers "scattered throughout a 10- or 12-state area," Mr. Brahler said. Each has an exclusive territory, since "we don't sell to people right on top of each other," he said.

    The company does not sell franchises, but instead enters into "partnerships" with its dealers in which they buy their raw materials from ITR, sign a confidentiality agreement and also agree not to compete in the same market, Mr. Brahler said.

    In general, the dealers are truck tire retreaders with many years of experience "who are looking for something to do at night," he said. That includes Mr. Brahler, who, besides ITR, also owns and operates Brahler's Truckers Supply Inc. in Jacksonville, Ill., a Michelin Retread Technologies Inc. franchisee which retreads 180-200 truck tires per day for customers in Illinois and central Missouri.

    ITR trains its dealers in the techniques needed to retread industrial tires. It also supplies them with dedicated equipment or "low-cost alternatives" to adapt their existing equipment, Mr. Brahler said. Industrial and truck tire retreading can co-exist in the same facility, but not in the same production run, he added.

    Some retreaders are daunted by the special handling and equipment requirements of industrial tire retreading, according to an article on the ITR website (www.itrtreads.com) written by International Tire and Rubber Association Executive Director Marvin Bozarth.

    During buffing, for example, the tires must be mounted with special adapters that fit the bead areas of the press-on solid tires or with special stud adapters that fit the hole patterns of the mounted wheels, Mr. Bozarth said.

    Diameter tolerances must be kept under 1/8 inch, because skid-steer loaders, forklifts and other industrial equipment have very stiff suspension systems. "Any variation in the tire diameters on the vehicle would cause serious traction problems," he said.

    The mix of materials, compounding and tread design is the key to high-quality retreaded industrial tires, which outlast new tires by a wide margin when made correctly, The company offers two distinct tread designs for skid-steer tires—"Hogtrack," the biggest tread, for off-road use and "Huskie" for on-road applications—as well as separate tread designs for forklift tires.

    "We have a special agreement with an Asian company to process our tread rubber in Malaysia," he said. "We offer the right treads with the right compounds at the right price.

    "So many industrial (re)treads don't get the wear or durability they should because of compounding," he added. "Some guys use truck designs and put them on those (industrial) tires, and they just don't wear. That's where you get the bad reputation industrial tire retreading has in some quarters."

    It's difficult to state a daily capacity for industrial tire retreading, because capacity varies widely depending on what type of tire is being retreaded that day, Mr. Brahler said.

    Tommy Hassler, president of Delval Industrial Tires Inc. in Pennsville, N.J., said his company does a wide range of tires, from forklifts to earthmovers. "We might do 10 tires one day and 40 the next, and still use up the same chamber space. I guess you could say we average 25 per day," he said.

    Delval has been retreading industrial tires for 18 years, Mr. Hassler said. The company started out as a Bandag Inc. dealership, but now uses ITR and "other sources" for its materials and retreading technology, he said. The company sells most of its tires to industrial tire dealersships in a territory ranging from central Connecticut to Washington, D.C., to Harrisburg, Pa.

    The profit margins between industrial tire and truck tire retreading are about the same, Mr. Hassler said.

    "Prices are higher for industrial tires, but there are also higher costs," he said. "You automatically increase your costs per unit with industrial tires as opposed to normal tires. For one thing, with big skid-steer tires, you have to handle them with an overhead crane, one at a time."

    The fortunes of the industrial tire and truck tire markets are directly related, Mr. Hassler said. "When the truck (tire) market is in a slowdown, so is the industrial (tire) market," he said. "But when my (truck tire) dealers are reporting a boom, in a couple of days I start getting orders, too. They're directly related."

    Retreading materials and equipment supplier Bandag Inc. does some business with retreaders of industrial tires. However, that segment represents only "a small piece of our market," said a company spokesman, declining to comment further.

    Bandag NV in the Netherlands, however, put out a press release this year announcing the introduction in Europe of the BandaCat tread, "a very rugged traction tread designed specifically for skid-steer tires." BandaCat had been available in the U.S. for the previous year, the release stated.

    "A lot of construction people use our tires on their trucks, and asked us to produce dedicated treads for skid-steer tires," the spokesman said. "We've been getting fantastic results with BandaCat; some end-users got four times the wear with BandaCat as with new tires."

    A few small, niche companies manufacture tread rubber for the industrial retreading market, but don't retread tires themselves. One is Oregon Rubber Co., a privately held company that employs about 50 workers at its tread rubber plants in Eugene and Corvallis, Ore.

    Tread rubber for industrial tires represents about 15 percent of Oregon Rubber's business, said Carl Sanders, company president. "We've been providing rubber for this market at some level for 25 years," he said.

    The company supplies tread rubber for solid forklift, pneumatic and some foam-filled industrial tires, Mr. Sanders said. "It's a different formula than for our other tread rubber. Without going into detail, it's a harder tread rubber."

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