TIVOLI, ItalyWhen Trelle-borg A.B. acquired control of Pirelli S.p.A.'s agricultural tire business in 1999, management discovered the plant in Tivoli outside of Rome had not been touched in more than decade.
Pirelli decided to shut down the plant at the beginning of the '90s and so for more than 10 years...they didn't invest any single cent in this plant, said Marco D'Angelo, industrial director for Trelleborg Wheel Systems. So when in 1999 Trelleborg took over the agricultural brand from Pirelli and...became owner of this plant, they found a really poor situation when it comes to infrastructures, networks, buildings. It was really a mess.
Today, in many ways, the evolution of the Tivoli agricultural and forestry tire factoryopened originally in 1939into a modern production facility mirrors the growth and maturation of Trelleborg's agricultural/forestry tire and wheel business itself.
Since acquiring the plant, Trelleborg has invested in it steadily, initially to increase production capacity. Then, starting in 2005, when Paolo Pompei joined the firm as president of Trelleborg's agricultural and forestry tire business, he began to change it in a structured way to make larger and larger farm tires. The factory added capacity for forestry tires in 2009. (Trelleborg Wheel Systems also has an industrial tire division that operates separately.)
When (Mr. Pompei) joined the company, actually the direction was quite clear: Focus this plant in the production of extra large tires, Mr. D'Angelo said.
Mr. Pompei's vision, along with that of Swed-ish parent company Trelle-borg, is to make it a leader and innovator in the farm and forestry tire segment.
We should be the customer of choice, he said during a presentation to a small group of U.S. and Latin American tire dealers, including Tire Business, visiting the plant in late March. Either we are No. 1, No. 2 or No. 3 in the segment where we operate. Otherwise we are out.
This is an aggressive statement, he acknowledged, but is a reality and it is well known from the gatehouse people to the top management. I think it's part of a winning tradition, because at the end of the day it's about creating value for the customer and creating a high-performance solution for our customers.
Mr. Pompei said that to be successful in agricultural and forestry tire manufacturing requires passion, a high-level of investment and a long-term commitment. It is a specialized business and capital intensive.
At Tivoli, Trelleborg is investing $6.5 million to install what Mr. Pompei said are the two largest agricultural tire-building machines in the world, capable of producing tires 8.2 feet (2.5 meters) tall and 3.9 feet (1.2 meters) wide.
The company claims it is the only farm tire maker offering two alternative products at 7.5 feet outside diameter: the TM 1000 in size IF 750/R46 180D, with a maximum load of 17,600 pounds at 23 psi and the TM 1000 IF 900/65R46 190D with a max load of 23,320 pounds at 35 psi.
From 2005 to 2013 the company pumped $384 million in capital expenditures into the Wheel Systems business, including $28 million between 2012 and 2014 for the extra large tire expansion at Tivoli.
To date in the agricultural business, there does not exist for a tire that is 2.5 meters yet, he said, so we are already developing machines that will be important in the future.
The addition of these two giant building machines will increase the plant's annual capacity by 20 percent, and fill up our growth in this part of the range in this business, Mr. Pompei said.
The new tire-building machines are aimed squarely at the growing market for tractors with higher horsepower.
In Europe, as an example, he said the tractor market has remained relatively level at 150,000 to 160,000 tractors per year. The market's also flat for tractors above 40 horsepower. But the picture changes dramatically when talking about tractors with 160 horsepower and higher.
The move is toward bigger, higher horsepower tractors and more production, and Trelleborg already is working with several OEMs in Europe and North America that are developing tires, testing, homologating tires in their range, Mr. Pompei said.
In Europe, Trelleborg expects OEM high-horsepower tractor registrations will grow 30 percent by 2016.
A similar trend is taking place in North America, but as tires become larger, so do other issues, such as slippage between the tire and rim, and vibration, especially while traveling on the highway.
In big farm tires, at the top of the range, a good combination between tires and rims is really important, Mr. Pompei said.
To reduce slippage, it is important to develop the tires and rims together, making sure the bead is working well with the rim, so that they stick together and don't move.
Vibration also is affected by tractor size. The bigger the application, the bigger the problem of vibration, Mr. Pompei said.
Trelleborg manufactures large agricultural and forestry rims at a factory in Savsjo, Sweden, which works closely with the Tivoli plant to provide complete tire and wheel solutions. The company also produces rims for smaller ag tires, from 3 to 16 inches in diameter, at a factory in Liepaja, Latvia.
This factory works together with two Trelleborg factories in Sri Lanka that produce small ag and solid tires.
The company's tire and wheel business operates eight factories worldwide, including one in Xingtai, Hebei, China, that Trelleborg purchased in 2011 from Maine Industrial Tire L.L.C. but which was renovated extensively into a plant for high-performance specialty, primarily agricultural tires from 16 to 42 inches in size.
Trelleborg subsequently acquired Maine Tire outright in early 2013, gaining control of the entire Xingtai property and giving it a U.S. manufacturing base, in Red Lion, Pa., for solid industrial tires.
Sales for the tire and wheel division were $643.5 million in 2013, or about 20 percent of the parent company's $3.2 billion overall sales, Mr. Pompei said, excluding the 50/50 joint venture with anti-vibration auto parts maker Trelleborg Vibracoustic. Agricultural products accounted for 58 percent of the tire and wheel division's sales last year.
Trelleborg Wheel derives about $148 million of its sales from business in North America, according to the firm's annual financials. The company, considered one of the world's 10 largest non-tire rubber product makers, has 60,000 employees, 90 manufacturing facilities and operates in 40 countries. The Tivoli plant is the company's largest factory.
The plant in Xingtai is a very important investment for us, mainly dedicated today for export but really focused on the local market, Mr. Pompei said, referring to ongoing manufacturing investments there by several major ag machinery manufacturers. We need to be there to support this growth, he said.
Developing tires and rims together can provide added value to the customer and solve a lot of problems, Mr. Pompei said. Often, for instance, if there is a problem of vibrational slipping the rim producer will blame the tire producer and vice versa, and no one takes ownership of the problem.
We say, we supply one wheel, we are responsible for the good success or failure, there is nobody else.
Offering complete tire and wheel solutions is a top priority at Trelleborg, Mr. Pompei said. In the forestry industry 90 percent of the business is complete wheel solutions.
As a Swedish company, Trelleborg also is focused on respect for the environment and the health and safety of its employees, Mr. Pompei said.
Sustainable farming is important to Trelleborg from research and development to industrial, to production to marketing, value to the environment is value to the customer, he said.
By producing solutions that reduce working time, lower fuel consumption and decrease CO2 emissions, you are giving value to the consumer, he explained, adding that at the same time we are contributing to creating sustainable farming operation.
Reducing soil compaction is a key focus for Trelleborgmaking sure you have tires that are supporting the crops and that they are not damaging the crops, Mr. Pompei said. This is becoming vital for the long-term usage of the same land.
While not all of these issues are high priorities in the U.S. market, they likely will in the future, he said. There will be a necessity to have strong compounds to deal with genetically modified stubble, higher traction in order to increase productivity and improved fuel consumption.
So I think we can really play an important role in the North American market bringing radial technology especially to the top of the range, he said.
Globally, Mr. Pompei is looking to expand Trelleborg's manufacturing and sales footprint, especially in new areas including North America. The company does control the industrial tire plant in Red Lion, but it has no overlap with the agricultural tire business.
When he joined the company 15 years ago, 90 percent of Trelleborg's tire and wheel business was generated in Europe. Today it is 60 percent and the percentage in other areas of the world is growing by two digits a year.
From 2010 to 2013, the company's manufacturing footprint has increased by 52 percent.
A key strategy now is to expand in other areas of the world and become a global leader not just a European leader.
That requires having factories very close to the market if you want to be effective and you want to be able to deliver in 24 to 48 hours wherever you are in the world in the top tier agricultural markets.
But in doing this, the company strategy will remain the same.
We are here to produce added value for our customers, Mr. Pompei said.
So we try to make sure that from the research environment, from the production, from the sales, our customers are able get more efficient operation, more production operation. This is vital.
To reach this reporter: [email protected]; 330-865-6130.