Green Diamond TireNorth America L.L.C. is restructuring its operations, planning to build a second plant and trying to rebrand itself as a producer of eco-friendly tires.
The company, which uses a technology from Iceland, is known for retreading radial passenger and light truck casings that have silicon carbide granules embedded in the treads. Those granules provide traction in snow and on ice, yet still can be driven year-round without damaging roads.
Green Diamond produces the treads at a plant in Elmira, N.Y., but has secured land valued at $5 million in Windsor, Colo., to build a second plant capable of retreading more than 1 million units, according to President Rich Gostenik, who formerly headed up the company's western distribution.
He was tapped as president last year by Green Diamond's Icelandic principals to replace Jeff Barlow. Mr. Barlow, who helped introduce Green Diamond Technology to the U.S. in 1999, still holds a minority stake in the company.
Since then, Mr. Gostenik has established an office in Sheridan that will be the company's home base and is looking for investors in the Windsor plantan effort that has been tough in this economy.
We're set up right now as the headquarters in Colorado, but it's only a shell organization, and it's not until we break ground on the second facility that we'll be populating this unit here in Colorado, he told Tire Business. Today, our emphasis is on expanding and maxxing out the New York facility.
The Elmira plant produces about 70,000 to 80,000 units annually in 30 sizes. Green Diamond will expand that range by 14 sizes to include the top 15th to 20th percentile of the most popular passenger and light truck tire sizes, Mr. Gostenik said.
The goal is to increase capacity in Elmira to 250,000 units per year, and that's contingent upon running three shifts instead of one and adding presses and other equipment, he explained. The company hopes to complete the expansion by year-end.
If we get the funding, we'll add presses and the associated molds in New York, he said. We need those tires immediately. And there's a good supply of casing sizes that we need in the East. So we don't have an issue there. And then we'll replicate those sizes in the West and then add additional tread designs.
Green Diamond also has switched its focus from supplying regional retail chains to supplying fleet vehicles. Mr. Gostenik said he would love it if a tire distributor or marketing group would sell Green Diamond tires, but he hasn't had discussions with anyone yet.
He also admitted he doesn't like to use the word retread to describe the Green Diamond product because he said the technologybead-to-bead remoldingis a level above your standard retread technology. But he does use the term in a generic sense when talking with industry people.
We're the only ones remolding radial passenger tires and radial light truck tires, he said. No one is adding the granule content.
Critical to expanding the company's production is rebranding Green Diamond because most people don't know that more than 70 percent of its tires' construction is recycled content, Mr. Gostenik said, adding the firm may be able to increase the recycled content up to 80 percent or more.
Hence, everything is on the table, including changing the company name, he said. We're not a household name, so if one of the ad agencies comes up with a better company name and product, that's something we'd review.
Another consideration for Green Diamond is building remolded tires with no granules and marketing that product to the Southern states as environmentally friendly tires. The company already has made non-granulated tires for New York City taxi firms, which, according to Mr. Gostenik, liked the low-cost, eco-friendly tires.
But all these plans could be stalled without the necessary capital, he acknowledged.
One of the problems we're having is that, as we approach an angel investor or an equity investor, we're having difficulty impressing on them that this is not a startup operation, he said. Green Diamond Tire has been manufacturing for well over a decade in Europe and Scandinavia and in the U.S. only since 2006. But it's a product that's not theoretical, it's established, but it's just not very well-known.
Mr. Gostenik declined to discuss company sales but said Green Diamond TireNorth America is not in the black yet. One option the company is considering to raise capital, he said, is to auction off retail territory exclusivity for its product.
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