Retreading firms Mountain Tire Corp. in Gorham and its Madison, Fla.-based affiliate MTC South are in expansion modes.
Mountain Tire plans to relocate its Oliver Rubber Co. precure retread operation by the end of June to a newly acquired building in nearby Berlin, N.H., providing much needed room to grow, President Melvin E. Olson said.
The new facility is 27,000 square feet in size, more than double the space the dealership has at its leased location in Gorham. Along with the move, Mountain Tire is investing $350,000 in new equipment, including two additional Salisbury curing chambers, a computerized buffer and two Matteuzzi tread builders.
Eventually, Mr. Olson sees retread production increasing to more than 250 medium truck retreads a day from about 160 units. The company also produces some light truck retreads.
The added capacity not only will permit better service to current customers but will give Mountain Tire a chance to grow, Mr. Olson said.
``For a few years, we've been working beyond what the retread shop was designed for,'' he said.
Founded in 1987, Mountain Tire is owned by Mr. Olson's father, Melvin A. Olson, who serves as vice president. The firm wholesales its retreads to dealers from Maine to Rhode Island, although in the past two years it also has started marketing to fleets.
The company also is working on acquiring another retread shop in the South, a transaction that could materialize in the next 90 days. ``We feel the trend in the industry is bigger,'' the senior Mr. Olson said. Should the deal occur, he anticipates the company's annual tread rubber usage could increase to about 3 million pounds within the next two and a half years.
Along with his ownership of Mountain Tire, the elder Mr. Olson also is a partner in MTC South, according to Pete Pervis, the firm's president and another partner.
Messrs. Olson and Pervis helped found MTC South in 2001. Housed in a 36,000-sq.-ft. building, the shop averaged 133 medium truck re-treads a day last year.
While the two firms are separate operations with some common ownership, they follow similar business practices, use the same suppliers and are working toward having common identification.
``So many tire dealers can't afford to be in the retread business anymore,'' the elder Mr. Olson said. ``We become their retread shop. We become someone who can go to a tire dealer and say, `We're not your competition.' It's been a good thing for us.''
In addition to offering precure retreads, MTC last fall purchased some Oliver mold cure equipment and began production of mold cure retreads in November. Precure retreading involves the bonding of an already cured tread to a tire casing. In mold cure, a new tread is molded onto a casing inside a mold.
``It's the process I prefer,'' Mr. Pervis said of mold cure.
MTC South acquired the mold cure equipment from Butler Tire Co. in Marietta, Ga., after that firm decided to get out of retreading, Mr. Pervis said. He offered to buy the equipment and supply retreads to Butler.
MTC South is producing about 80 mold cure truck tire retreads a week.
Offering mold cure retreads, which have a lower production cost than precure, has allowed MTC South to compete more effectively in the Florida and southern Georgia marketplaces.
``Some competitors are getting down and dirty on the price of the precure product,'' Mr. Pervis said. ``This is a way to get in the front door of some of these businesses.''
Like Mountain Tire, MTC South wholesales its retreads and has no commercial locations of its own.
Mr. Pervis is a long-time veteran of the retreading industry, having started in the business in 1961, while a high school student at Performance Rubber Co., the retread shop his father Jim founded in Tallahassee, Fla. He later became a partner in that company and also has been a partner in Commercial Tires Inc., another retreading concern in Tallahassee, before helping start MTC South.
Combined, Mountain Tire and MTC South consumed 1.9 million pounds of tread rubber in 2004, producing an average of 255 medium truck tires daily. The companies reported combined sales of $5.7 million in 2004 and anticipate that growing to nearly $6.9 million in 2005.