With a new president, new products and a new focus on marketing, Alliance Tire Co. (1992) Ltd. has its sights on doubling its U.S. sales to $20 million within three years.
For Yossi ``Joseph'' Anglister, president of the Hadera, Israel-based farm tire manufacturer, the goal represents regaining markets the company had lost in recent years to low-cost competition from the Far East. Mr. Anglister was named president in April after 33 years in the industry.
``We believe we can bring back some of the lost markets in the United States,'' he told Tire Business.
The first part of the plan is to bring Alliance back into profitability. In the year's first quarter, the company posted an operating profit of $160,000, followed by a $1.1 million operating profit in the second quarter.
``The trend is positive,'' Mr. Anglister said. ``We don't know yet what are the results of the third (quarter), but the trend looks good.''
Another part of the company's plan is a renewed focus on marketing in the U.S., which accounts for about 10 percent of Alliance's sales, compared to Europe's 50 percent. Shaul Nuri, marketing and sales manager for Alliance, said the company will promote its sophisticated tires-including radials and flotation tires-at a competitive price to compete with name brands while also marketing its bias or lower-cost products.
That's ``so we can position ourselves in between the big brand name tires and the low-cost tires, which are coming from China and Indonesia,'' Mr. Nuri said.
Alliance-made flotation tires already are sold in the U.S., but the tire maker hopes to up the ante for its tires here. Flotation tires are designed to hold a large volume of air with low pressure to reduce compaction in the soil. Soil that is not compacted allows roots to penetrate easier, starting healthier crops, Mr. Nuri said.
Alliance Tire planned to unveil a prototype for a new radial flotation tire, the AgroTransport, at Agritechnica 2003, a trade show Nov. 11-15 in Hanover, Germany, for agricultural machinery. The tire is designed to be effective in the field yet also go up to 90 kph (about 55 mph) on the road.
Mr. Nuri said Alliance Tire's marketing plan calls for the company to reach out to farmers, ag tire dealers, wholesalers and other professionals to promote the quality of the company's tires based on the customer's needs. Alliance Tire also hopes to increase its network and help distributors and dealers push the more sophisticated radial and flotation tires.
``Our tires work in the fields where it's filthy, where it's hard work,'' he said. ``What we need to do is appeal to the professional, and that's what we're planning to do.''
In the meantime, Alliance Tire continues to look for a strategic partner as well as offtake production agreements, Mr. Anglister said.
In February, an American investors group withdrew its $50 million offer for 51 percent of the tire maker's stock because of instability in the Middle East as well as Alliance's inability to restructure its loans. Harvey Brodsky, head of the Harvey Brodsky Group L.L.C. and managing director of the Tire Retread Information Bureau, said at the time he may reconsider the negotiations.
Mr. Anglister said Alliance continues to look for a partner, though the company is not currently in talks.
``We're not looking for financing investors, we're looking more for a strategic investment,'' he said.
The tire maker also is looking into more offtake manufacturing agreements to help it shed some excess capacity. Mr. Anglister said the company recently signed an agreement with an unnamed international tire maker worth 10 million euros ($8.59 million USD) to produce farm tires under the other company's brand. ``They recognize our quality, our performance,'' Mr. Anglister said.
Alliance Tire's single plant in Hadera now is operating at about 70 percent capacity, with turnover of about $100 million this year compared to its capacity of $150 million. Last year the company produced about $93 million. Mr. Anglister said other offtake agreements may be possible to soak up the rest of the capacity.
But the company's first preference, he said, is to increase sales in its existing markets in Europe and the U.S.