Alliance Tire Americas Inc. plans to open a third warehouse in the U.S. next year to support anticipated growth and will expand its relationship with China's Aeolus Tyre Co. Ltd. to include radial OTR tires, company officials said during the 2010 Specialty Equipment Market Association (SEMA) Show in Las Vegas.
Alliance Tire, the Brentwood, Tenn.-based subsidiary of Alliance Tire Group (ATG), is still evaluating locations, ATG chief executive Yogesh Mahansaria said. Alliance Tire Americas operates warehouses in Brentwood, Tenn., and Houston.
Since acquiring the Galaxy and Primex brands last year in the bankruptcy proceedings of Galaxy Tire Corp., ATG has organized its business into two basic groups, Mr. Mahansaria said. Those are agricultural/forestry/construction (AFC) and earthmover (EM), with the Alliance and Galaxy brands primarily in the former and Primex in the latter.
Although there are some overlaps, Alliance is treating them as distinct segments requiring distinct distribution strategies and personnel, he said.
The underlying dynamics of each is different, he said, with the EM sector dominated by the world's major tire makers but the AFC less so. Nonetheless, he said, ATG sees opportunities in a number of niche EM segments, such as underground mining.
Mr. Mahansaria said he is bullish on business in North America because of the loyalty and enthusiasm that Galaxy dealers have expressed in the brand since ATG acquired it.
In terms of supply, ATG has restructured its plant in Israel to concentrate on higher value-added radial farm and forestry tires, while its plant in India is geared toward larger volume, longer-run products, he said. ATG should complete the first phase of building and equipping the Indian plant by March, he said, with the second phase expansion coming on stream 12 to 15 months later.
Among new products in the pipeline, he said, are winter tires for tractors, radial for-estry tires and radial flotation farm tires capable of running at 60 mph on the road.
Alliance's business with Aeolus is flourishing since Alliance took over GPX's exclusive distribution rights for Aeolus-brand radial truck tires, said Manny Cicero, president of Alliance Tire Americas, and will strengthen next year with the addition of Aeolus' radial OTR tire line.
Jiaouzuo-based Aeolus added radial OTR tires to its product mix a few years ago, Aeolus Vice General Manager Shen Hongliang said.
The firm makes sizes up to 33-inch rim diameter but has 49- and 57-inch sizes under development, he said.
Aeolus is boosting capacity at its headquarters plant, Mr. Hongliang said, so that output next year will approach 250,000 metric tons of processed rubber.
Considered the 25th largest tire maker worldwide with 2009 sales of $827 million, Aeolus generates about one-third of its annual sales from exports, Mr. Hongliang said.