Almost a year after acquiring the retreading operations of Hercules Tire & Rubber Co., Cooper Tire Rubber Co. has integrated those assets and relaunched the tread rubber product range as ``Mega Mile.''
The Hercules acquisition has helped Cooper ``offset the loss'' of business with Treadco Inc., formerly the largest customer of Cooper's Oliver Rubber Co. subsidiary, according to Larry Enders, president of Cooper's commercial products division. The Hercules business will contribute to an anticipated annual sales boost of about $15 million to $17 million in the commercial business, according to Cooper's 2001 annual report.
Cooper's retread business fell 23 percent in 2001 from 2000, with approximately 57 percent of that decline related to losing Treadco's business to Goodyear, Cooper said in its 10-K filing with the Securities & Exchange Commission. The purchase of Hercules' retreading assets helped Cooper rebound in the third and fourth quarters, though, the report stated.
The Oliver business reported annual sales of $160 million when Cooper bought Oliver's parent Standard Products Corp. in August 1999.
Cooper has completed integrating those operations, which included inventory, a precure press, molds, the former Cedco equipment division and intellectual assets, Mr. Enders said, noting the most significant aspect has been the customer lists and intellectual properties. Cooper paid $6 million for the Hercules assets, lower than the $8.5 million target price originally announced.
``In addition to picking up a significant number of former Hercules customers as planned, other opportunities have presented themselves as we've been kind of identified as a tread rubber supplier to that segment of the market that was formerly serviced by Hercules,'' he said. Cooper picked up about 150 customers in the Hercules purchase, according to company data.
Cooper now has broadened its offerings to include both Oliver and Hercules tread rubber products in a newly named line called Mega Mile, he said. Cooper began marketing the Mega Mile precure tread rubber line in January with advertisements in trade publications and through direct solicitations to Oliver's former Long Mile customers and Hercules' former customers. The Long Mile name has been discontinued.
``We've used the opportunity of the (Hercules) acquisition to put together a product offering of the Mega Mile line that services a combination of the former Long Mile and the Hercules customers and other price point retreaders with an entry-level product offering...,'' Mr. Enders said.
He added that with Mega Mile, retreaders have an affordable product for fleets that are looking to save money and don't want premium performance-level retreads.
At the same time that it has been rolling out Mega Mile to dealers, Cooper also has been concentrating on expanding its current dealer network by helping its dealers grow their businesses through additional capacity and equipment, Mr. Enders said.
Cooper's dealer network must expand its national coverage, he said, before the tire maker can consider providing cradle-to-grave services to fleets. He also said that Cooper is pursuing some original equipment contracts, but he declined to elaborate on that or on which markets the company has targeted to expand its dealer base.