PANAMA CITY, Panama — Costa Rica-based retreader and new tire dealership Trac-Taco S.A. has opened a retread production line for farm tires at its year-old Bandag Continuum off-the road retread tire facility in Panama.
The company expects the move to generate additional sales as construction and mining activity slows in the country.
Trac-Taco, which opened the Panama City plant in July 2014, is using the Vacu-Lug process to retread the agricultural tires, said Miguel Yamuni, general manager of Trac-Taco Illantas y Recauche. Tire Business interviewed Mr. Yamuni at the Latin American & Caribbean Tyre Expo, which took place July 16-18 in Panama City.
The move to add ag tire retreading in Panama comes as the economy has dipped and the government put a ban on mining, Mr. Yamuni said. In addition, expansion of the Panama Canal is winding down, further putting a crimp on demand for OTR tires, retreaded and new.
Ironically, a similar situation in Costa Rica precipitated Trac-Taco's expansion into Panama. A “green” country, Costa Rica has no oil or gas exploration nor open pit mining, Mr. Yamuni said. In addition, there is little investment in infrastructure and major projects such as the development of hydroelectric plants have been completed, reducing demand for medium OTR tires.
Costa Rica's ban on imported tire casings from Panama also contributed to the decision.
Still, the company was able to increase sales 7-8 percent last year by expanding new tire sales, Mr. Yamuni said.
Trac-Taco's Panama retread operation consumes about 20,000 pounds of tread rubber per month, Mr. Yamuni said. The company buys slab stock rubber from Bridgestone/Firestone and cold extrudes slugs to make cushion gum for the retreading process.
In an earlier interview with Tire Business, Trac-Taco said the Panama plant was capable of retreading up to 35-inch OTR tires, with capacity for 49-inch tires to come. The plant has 12 employees, Mr. Yamuni said.
Trac-Taco got its start when Mr. Yamuni's late father Juan, who had been working at the then-Firestone tire plant in Costa Rica, was offered a position in 1972 at a company that ultimately would become Trac-Taco. The elder Mr. Yamuni started buying stock in the firm and in 1990 acquired it outright, his son said.
Today, Trac-Taco operates a Bandag-system truck tire retread plant in San Jose, Costa Rica, producing 800 retreads per month. Located in that same building, the dealership has a Vacu-Lug OTR and ag retread tire plant producing 250-300 units monthly. Trac-Taco switched to the Bridgestone/Bandag retreading system in 2012 from precure tread produced by Mexico's HBplus Bandamatic S.A. de C.V.
In addition to retreading, Trac-Taco sells Bridgestone- and Firestone-brand new tires and has been a 100-percent Bridgestone/Firestone distributor since 1973-74, offering the tire maker's complete line of passenger, light truck, commercial truck, agricultural and OTR tires.
New to the company's offerings is Bridgestone's Dayton associate truck tire brand, which Trac-Taco is using to compete more effectively with lower-priced new truck tires from China.
In addition, Trac-Taco runs a retail tire operation in Costa Rica that also sells tires to sub-distributors, and has a wholesale business operating from a 15,000-sq.-ft. warehouse stocked with Bridgestone and Firestone ag, passenger and light truck, truck and industrial tires.
The dealership employs 57 in Costa Rica and 12 in Panama.
Going to market, Trac-Taco bill's itself as a premium supplier, providing a premium lineup of tires and offering customers a complete service package, including tire administration.
“We're hands on with customers,” Mr. Yamuni said.
Like many retreaders in Central America, Trac-Taco's truck tire retreading operation is facing increased competition from lower-priced truck tires imported from China, he said.
The price differential between a new Chinese-made truck tire and a retreaded one has narrowed, according to Mr. Yamuni, with a Chinese new tire costing about $220 compared with about $170 to $180 for a premium retread.
To combat this competition requires educating the customer about the advantages retreading offers such as providing better treadwear at a lower cost than the new tire, he said.
To reach this reporter: [email protected]; 330-865-6131