Marangoni Tread North America Inc. (MTNA) recently completed a $10 million expansion of its Madison tread rubber plant, but the company isn't finished by a long shot.
Bill Sweatman, president and CEO of MTNA, said the retread materials maker plans to add more capacity to the plant in the second half of 2012 and already is planning for a “major expansion” next year, though he did not disclose specific details.
“Besides our facility here, we've got 13 undeveloped acres adjacent to our building,” he told Tire Business. “We're expecting all our manufacturing capacity to be here in Madison.”
MTNA parent Marangoni S.p.A. and Continental A.G. ended their tread rubber pact last December covering the use of the ContiTread trademark in the Americas, with Marangoni no longer producing the tread rubber for sale in the region. The decision was a mutual one that would allow both companies to pursue their own goals in the Americas.
Since then, MTNA has been working to offer more products and services.
“There's a basic difference between manufacturers and what we do, which is supplying retreading materials to dealers and independent retreaders,” Mr. Sweatman said. “And we're committed to our independent dealers and to retreading technology. That's our primary goal. In order to do that, we need to grow and expand, add more products, programs and services, primarily for those independent dealers.”
In its most recent expansion, MTNA boosted capacity at its Madison plant and added a production line to produce its Unitread value brand of conventional tread rubber. So far, the company has 68 Unitread SKUs available for sale in North America with another 16 launching over the next two months, Mr. Sweatman said.
“We're committed to the manufacturing here in the U.S., and until we were making the conventional pre-cure tread line, we were importing that product,” he said. “By establishing manufacturing here and expanding the product line, the tread designs (and) the sizes—quite frankly, we didn't have much of that business. By adding that, it gives our dealers the opportunity to hit a different price point and introduce different products into their marketplace.”
While MTNA is now producing Unitread products domestically, the company continues to import some products from Italy, Germany and Brazil.
Mr. Sweatman said the addition of the Unitread line also allows Marangoni to serve independent retreaders without access to its Ringtread technology. Of the company's more than 40 retreaders in the U.S. and Canada, about 12 to 15 are Unitread only, he said.
The expansion also boosted Marangoni's Ringtread capacity by about 25 percent and has allowed the company to offer a complete line of retread manufacturing supplies, equipment and fleet tire management accessories, Mr. Sweatman said.
“Business the last couple of years has been very, very strong, and our market share has steadily increased,” he said. “So this just allows us to sell more stuff to more customers.”
The company is continuing to introduce more fuel-efficient products and expand its line of tread rubber for wide-base tires, which Mr. Sweatman said are beginning to grow in popularity.
“It's a small percentage, but it's growing,” Mr. Sweatman said. “What we're seeing and how it really impacts us is that a lot of fleets may not be committed to that line yet, but they're trying them. Fleets that are loyal to the Marangoni Ringtread product want to stay on it; they don't want to go out and have another product line just for those tires.
“If we want to earn a fleet's business—all of its business—then we need to be able to retread all its tires.”
The company said the investment for standard pre-cure wide-base retreads is “less so” than on the Ringtread side, where modifications to builders are needed in order to handle larger dimensions of the tire. He did not disclose the size of investment required to make these modifications.
According to Mr. Sweatman, roughly 60 to 70 percent of MTNA dealers are capable of handling wide-base tire retreads.
“Some dealers have really broad customer bases with a lot of over-the-road tractor trailer business and fleets, and others are maybe more concentrated on a different segment where there's not that big of a (wide-base) market share yet,” he said. “It's taking a natural evolution and has steadily grown.”
Mr. Sweatman said the company believes demand for replacement commercial truck tires will continue to grow, along with MTNA's market share in the Americas, which has reached 4 percent, according to the firm's 2011 executive summary.
“We're really optimistic,” he said. “This is our 11th year of steady increasing growth and we're real confident it's going to continue. We're real pleased with our commitment to strong independent dealers and retreaders.”