SUWANEE, Ga. (May 16, 2002)—A tree planting. Speeches by company and community officials. Tours. An outdoor white-tablecloth reception complete with American and Asian hors d'oeuvres and mellow music by a harpist.
Maxxis International-USA rolled out the red carpet in style at a May 1 dedication marking the expansion of its headquarters and warehouse in Suwanee.
While the event centered on the recently completed $5 million, 106,000 sq.-ft. Suwanee addition, it also served as a celebration of how far Maxxis has come since the wholly owned subsidiary of Taiwan's Cheng Shin Rubber Industry Co. Ltd. was established in the U.S. on Jan. 1, 1985.
Back then the company had just two employees—James Tzen and Grace Ju—who remain with Maxxis today serving as president and treasurer, respectively.
“We had a difficult time in the beginning,” Mr. Tzen told employees at a luncheon prior to the dedication. “Grace and I worked hard and were able to develop the business.”
Reminiscing about those early years, he recalled the day the first load of tires arrived from Taiwan. “We weren't ready,” he joked. “I think they shipped the container before we even had ordered it.”
Now, 17 years later, it's a “very special day,” he continued. “I feel very good about our current investment because we are now in a position to grow our business in the next five to 10 years.”
From its humble beginning, Maxxis' sales of passenger, light truck, ATV, bicycle and industrial tires have grown to more than $100 million annually in the U.S. The company, which goes by the name of Cheng Shin Rubber in Asia, has 70 employees in the States and operates warehouses in Coppell, Texas, Brampton, Canada, and Ontario, Calif. It also maintains a research and development facility in Norcross, Ga.
Mr. Tzen attributed the company's growth to its commitment to developing quality products and to its good brand image.
Maxxis has “a sterling reputation,” said Louisville, Ky., tire dealer Steve Disney, who also is president of the Tire Association of North America. “They've been very persistent about achieving their goals.” Mr. Disney also serves as president of the private brand firm, Sure Tire Co., and was one of about 50 guests invited to the dedication ceremony.
“I remember dealing with them a decade ago, and here we are a decade later and they're making their numbers.”
And the company's growth continues.
Already it's expanding warehouse capacity in California, where it plans to move into a leased 113,000 sq.-ft. facility in Rancho Cucamonga in October. The new distribution center will be nearly double the size of the Ontario warehouse, which will be closed. The new warehouse also will have the capability of stacking tires five racks high vs. the Ontario site's four high—which will provide even more storage capacity, said Robert Daughter, the company's California distribution manager.
While Maxxis traditionally has focused its sales efforts on the southern half of the U.S., the company plans to look northward in the future, Mr. Tzen said, and will add independent tire dealer outlets as production capacity and supply allow.
As for 2002, Maxxis wants to boost U.S. revenues to $120 million, which includes direct shipments from the company's factories to some customers here, said Wally Chen, Cheng Shin Rubber president whose vision and leadership led the company to ex-pand globally years ago.
Founded 35 years ago with a focus on bicycle tires, Cheng Shin/ Maxxis has evolved into a global manufacturer, with 7,000 employees working on three continents. The company—the world's largest manufacturer of bike tires—posted sales of $501.6 million in 2001 and ranked in 2000 as the 13th largest tire maker in the world.
Interviewed during the dedication ceremony, Mr. Chen said Cheng Shin's goal is to crack the top 10 ranking of the largest tire makers and to have the Maxxis name listed among the top 100 brands globally. To do that, he said, “we have to increase sales and make Maxxis a household brand worldwide.”
Maxxis/Cheng Shin, he ex-plained, is dedicated to producing quality products and developing good customer relationships. “We want our customers to make a profit selling our tires,” he said. “But it's got to be win-win.”
To handle the expected sales growth, Cheng Shin is expanding production at its tire plants in Taiwan and China.
Production capacity at its Shanghai, China, factory, a joint venture with Toyo Tire & Rubber Co. Ltd., stands at about 12,000 passenger and light truck tires a day, Mr. Chen said. That will nearly double over the next year, he explained, as a result of two expansions that will add production capacity for 5,000 more tires a day by July or August and another 5,000 by the middle of next year.
Many of these tires will go to local markets, although some will be exported to the U.S., Mr. Tzen said.
The company also plans to expand its plant in Yuanlin, Taiwan, adding new tire building equipment that will boost capacity for passenger and light truck tires to 15,000 units a day from about 12,000 a day. The project should be completed by this fall.
Along with additional production capacity, Maxxis/Cheng Shin will continue to market and promote its products aggressively, including continuing its sponsorships of ATV, bicycle and motorcycle racing events primarily in Europe, Australia and the U.S. It also will continue its sponsorship of off-shore F1 boat racing and the Atlanta Braves baseball team. In addition, it has become a sponsor of AOL Arena, a soccer venue in Hamburg, Germany.
Although not yet a household name in the passenger and LT segment, Maxxis is well known for its bicycle, ATV and motorcycle tires. Recently, readers of Transworld BMX, BMX Plus and Mountain Bike Action magazines voted Maxxis the No. 1 tire, Mr. Chen said.
In its March issue, ATV Action magazine rated the Maxxis Mudzilla ATV tire the best mud tire in a test involving five other brands.
In addition, the company has been racking up various honors.
The global edition of Forbes magazine named Maxxis one of the 200 best small companies in the world in its Oct. 29, 2001, issue.
In December, General Motors Corp. in Shanghai honored the company for its high quality products and service.
And in March 2001, Maxxis received Ford Motor Co.'s Silver World Excellence Award for its exceptional accomplishments during the year.
Maxxis/Cheng Shin supplies tires to Ford in Taiwan, China and North America, where it provides spare tires for several Ford vehicles made in Canada.