QUINCY, Ill. (June 12, 2013) — Falling farm and OTR tire prices — the result of heavy equipment makers' and mining companies' releasing tires from their inventories into the aftermarket — should last only a few months, Titan International Inc. Chairman and CEO Maurice Taylor Jr. said recently.
"We feel that this is a bump in the road as we have experienced this in the past," Mr. Taylor said in a prepared comment on the first five months of 2013.
Mr. Taylor attributed the temporary supply situation on some short-term decision making.
"I think of all the overtime and weekend work to produce tires that go into building inventory, and then when they see the storage cost, they discount them into the aftermarket," he said.
Mr. Taylor estimated the OEMs and mining companies have dropped millions of dollars worth of farm and OTR tires into the aftermarket in recent weeks.
"I have stated over and over that all the talk of tire shortages has been false," he said, while also noting that falling raw materials costs have driven down selling prices.
Separately, Mr. Taylor said Titan recently sold 44 percent of its Titan Australia business to Australia's Planet Group—with which Titan has a joint venture—in order to "get the best results and grow the business."
Mr. Taylor's comments were published together with the company's recent acknowledgement of negotiations in Russian with JSC Cordiant about investing in Cordiant's farm and OTR tire plant in Ekaterinburg, in Russia's Sverdlovsk region.
Mr. Taylor indicated in the statement that the possible Cordiant deal could be just one of a number of such deals this year.
"We are still moving ahead on the acquisition trail and expect a number of these transactions to close before the end of this year. Overall, I still see this year as a record year and one that will set the course for Titan's growth."
Contributing to Titan's growth would be the improved performance of Titan's Bryan, Ohio, OTR tire plant under the direction of Titan Tire Chairman and Titan International Executive Vice President Bill Campbell, the company said.