VERONA, Italy (July 16, 2001) — Marangoni S.p.A. has started production of precured tread rubber at a new plant in Belo Horizonte, Brazil, designed to supply Brazil´s growing demand for retreads.
The 14,000-sq.-ft. plant cost Marangoni $10.9 million to build and equip. The company has earmarked an additional $4.3 million for infrastructure improvements and new product development. Employment at start-up is 60, but should rise to 140 over time, Marangoni said.
Marangoni expects the new venture to generate sales of $5.2 million in the first full year of operation, rising to nearly $22 million within four years. Brazil is the second-largest market for retreaded tires in the world, using 10 million annually, Marangoni said. The Brazilian retread market consumes 12,000 metric tons of rubber per month.
The plant is Marangoni´s first production facility outside Europe. It has been designed to produce precured tread rings for Marangoni Tread´s RINGtread system and associated accessory products. Besides serving the Brazilian market, the plant eventually will produce goods for export to North America, other Latin American countries and Africa.
Marangoni Tread has been active in Brazil since 1995, operating through a network of 16 authorized retreaders, the company said. This network should grow to 40 within four years.
The retread and retreading systems producer suffered a 76.1-percent drop in net earnings last year to $1.5 million, while sales rose 9.7 percent to $221.6 million. The company blamed the profit erosion on the increased cost of raw materials and its inability to recoup these costs in prices for its own products.
Of the firm´s five business areas, sales of new tires rose 18.3 percent to $58.7 million; sales of retreading materials were up 7 percent to $76.1 million; and retreaded tire sales rose 12.8 percent to $52.9 million. Sales of retreading and tire recycling equipment fell 14.3 percent to $5.1 million.