Some OTR tire flat-proofing system manufacturers are pushing their customers toward ``greener'' pastures in the altruistic pursuit of environmental friendliness and worker safety.
Unfortunately, these developments come during a—no pun intended—flat period in the flat-proofing market.
The market had been on an upswing until the recent downturn in the economy, particularly in the construction industry, a major user of tire flat-proofing products, according to Joseph Danules, CEO of Pathway Polymers Inc.
He sees more price competition in the flat-proofing market, which he said is experiencing no growth. ``We do see our business growing at the expense of our competitors. The market is flat or growing slightly in North America but growing dramatically in Europe and China.''
With the economic slump, cost has become a major consideration for customers. ``No one can argue with the concept of less downtime (with flat-proofing). It's, `What is the downtime worth vs. the cost of a tire fill?''' Mr. Danules said.
Arnco Inc. President Larry Carapellotti contends that 80 percent of the potential end-user market for flat-proofing remains untapped. Just about any off-road vehicle is a candidate for flat-proofing, added Arnco's director of marketing, Bob Giasson, since the vehicle can perform better, safer and for lower maintenance cost if it never has a flat tire or hazardous blowout. He described tire foam filling as ``an invisible solution to a problem that's as old as the tire industry. When people get a flat, that's when they look for solutions.''
Mr. Carapellotti said his company and the industry experienced double-digit growth in 2003-06, but this past year has been flat. Quantity sold in the industry is about even as in the past year, but dollar sales are higher due to price increases in the domestic market.
In the mining industry, the shortages of large OTR tires have created increased demand for tire filling as end-users try to extend the life of their tires, according to Mr. Giasson. Prices on standard polyurethane products have ``all taken a big hit,'' he added, due to the rising costs for the three main ingredients—poly-urethane, toluene diisocyanate (TDI) and oil. Dealers in turn set their own prices and, therefore, their own margins, he said.
In an effort to steer away from a dependence on oil and offer environmental benefits, several manufacturers are introducing alternatives. Arnco and Amerityre Corp. have developed tire-fill products that don't use oil, and Pathways Polymers is offering tire-filling equipment that allows dealers to recycle old filling.
``Companies that come up with more environmentally friendly, innovative and lowest cost products will be the most successful,'' said Pathway's Mr. Danules.
He said end users are more conscientious of environmentally friendly products, but they are also conscious of costs.
``We found if you have a product that's environmentally friendly, it's difficult to get the aftermarket to invest in it unless there's a cost decrease. We can have products that are more environmentally friendly that cost more but typically don't sell well.… That's because the market is such a competitive environment out there.''
Arnco recently introduced its ecofil line that uses renewable ingredients, is lighter weight than traditional fill and can be disposed safely in landfills. The company also said the product is less expensive than its traditional tire-fill products.
South Gate, Calif.-based Arnco markets several polyurethane flat-proofing pro-ducts for specialty and OTR tires used in steel mills, scrap yards, landfills, mines, factories and construction. Its sales are split evenly between aftermarket and original equipment manufacturer sales.
The company distributes through about 400 independent tire dealerships and through national account dealerships. While Mr. Giasson said the company has sufficient coverage in North America, it is looking to expand its presence in Europe and Asia.
The company has production sites in Berea, Ohio; Manchester, England, and in South Gate.
Arnco provides a certification program in which each dealership has to complete an on-site training program and written tests before it can set up operations. Mr. Giasson estimated it costs a dealership about $10,000 in initial investment, including about $5,000 for the pump.
The dealership needs to have sufficient floor space to run the tire-filling operation and set up a ``hot room'' that maintains a room temperature of 75 degrees or higher. The hot room is important, according to Mr. Giasson, otherwise if the filler gets cold, it gets thicker, making it hard to pump into a tire and taking longer to cure.
Arnco provides its certified dealer network with field sales development via its territory managers, product information literature and advertising co-ops.
Pathway recently announced an incentive program offer of reduced rates on three- to four-year leases for its AutoFill tire-fill machines.
The machine allows dealers to recycle used tire-fill foam by mixing it with about 50-percent virgin material for reuse in a tire.
``It's a tremendous cost savings to the dealer,'' Mr. Danules said. ``We felt with oil going up as much as it has we felt this is a significant way for dealers to cut down on costs.''
Pathway also offers its TrioFill machine that uses crumb rubber as 35 percent of a blend with virgin tire fill.
With Pathway's recycling machines, ``we think we can be successful over the next three years because we're attacking the cost side of the equation and that makes it a benefit to the OEMs and the dealers,'' Mr. Danules said. ``So our biggest challenge for us as the supplier of tire fill and flat proofing and machines is to continue on the innovation and cost-reduction path we're on.''
Since dealers set their own prices on flat-proofing services, ``dealers with our (recycling) machines can offer a far more competitive price,'' he added.
Last June, Pathway Polymers, a producer of foam and industrial polymers, and Urethane Holdings L.L.C. merged their operations into a newly incorporated Pathway Holdings Ltd., based in Chattanooga, Tenn.
The combined operations, doing business as Pathway Polymers, has sales of more than $50 million. It has set its sights on expanding its markets into Europe and China and doubling its sales in three years.
The merged company said it wanted to take advantage of the synergies of the two companies and plans to be a ``one-stop shop'' for flat-proofing products. It operates a tire fill production plant in Chattanooga and a contracted manufacturing company produces the patented tire-fill machines.
Its sales are split evenly between OEM and commercial tire dealer distribution throughout the U.S. and in parts of Canada and Mexico.
The company offers field sales support, service and parts support on machines, and training and dealer certification on the use of the filling machines. The company plans to open a training center at its Chattanooga plant that will provide machine demonstrations and classes on proper and safe ways to fill tires.
``We'll concentrate on the safety aspect of tire filling and try to explain to our customers the impact recycling can have on their businesses and the environment,'' Mr. Danules said.
``Historically, it's customer demand for the product (that drives sales),'' he said. ``But dealers who go out and solicit business and see it as major source of income do a better job than those who wait for them to come in.''
Boulder City, Nev.-based Amerityre is entering the market fray with its own lightweight Amerifill material made with naphthylene diisocyanate (NDI), which it claims is healthier and safer than petroleum-based TDI tire fills.
The company's reason for engaging in a competitive market: ``They (other fill makers) don't have NDI-based products. We do,'' said Mike Kapral, vice president of marketing.
He said Amerifill lightweight fill and a pending elastomer fill ``fits our business plan'' as a developer of polyurethane OTR and passenger tires and products. The lightweight foam is applicable for smaller equipment and skidsteers, providing half the weight of traditional fill, less wear and tear on the vehicle and a softer ride, Mr. Kapral said. The elastomer fill can be used for mining tires, skid steers and essentially all applications.
Mr. Kapral said that although the products cost more than traditional flat-proofing material, in the end the lightweight fill costs about the same based on weight because a tire would require less than half the amount compared with traditional fill. Amerifill can be safely disposed in a landfill since it won't pose a leachate problem, he said, and the product won't burn, which is an important feature for underground mines that can experience fires.
Amerityre is selling the tire fill through tire dealers and is slowly building its dealer network in the U.S. and Brazil while also looking at the European market.
The equipment and supplies needed for the lightweight fill costs a dealer about $50,000, Mr. Kapral said. He admitted dealers will have to adjust to the difference of lightweight fill as it has a different chemistry and filling procedure than traditional fill. For instance, instead of filling a tire through the valve, a dealer would pop the top bead and use a tube to inject the fill, which ``rises like dough,'' he said.
Amerityre processes the tire fill at its Boulder City plant and is fulfilling current orders in the replacement tire market. Amerityre contracts another manufacturer to produce the pumping equipment and resells the equipment to dealers at cost, Mr. Kapral said.
The company is planning to conduct a marketing push for Amerifill in the spring when the construction market usually rebounds.