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September 25, 2015 02:00 AM

Mitas' goal: Expand footprint, add 'innovative' ag tires

Kathy McCarron
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    CHARLOTTE, N.C. (Sept. 25, 2015) — Three years after opening a farm tire plant in the American heartland, Czech tire maker Mitas a.s. is trying to expand its distribution footprint into more markets around the country while at the same time introducing what it believes are innovative designs to equip agricultural vehicles.

    The privately held company, a unit of CGS Holding Group, opened its U.S. plant in April 2012 in Charles City, Iowa,  and has since reached full capacity of 13,500 metric tons of mainly drive-axle radial tires per year.

    It chose the location to be close to its OE customers, which include Deere & Co., CNH Industrial, Unverferth Manufacturing Co. Inc., Claas Group and AGCO Corp.

    Mitas a.s. photo

    Mitas' Pneutrac concept is a pneumatic tire/track hybrid concept that the company has been demonstrating at various trade shows.

    Worldwide, Mitas' tire sales are divided evenly between OE and replacement markets. In North America, it derives 60 percent of its sales from the replacement market, but the company expects to boost OE for a 50/50 mix over the next five years, according to Courtland Michaels, vice president of sales for Mitas Tires North America Inc.

    The Iowa plant produces Mitas-brand tires — at sizes up to 54 inches in diameter — for the U.S. market and to supply its OE customers in the U.S. The parent company also makes bias tires and small implement tires at its plant in Czech Republic for the U.S. market and also operates a factory in Serbia.

    Mitas bought Continental A.G.'s farm tire business in 2004, a deal that included rights to use the Continental brand name for agricultural products.

    The company since has phased out the Conti brand in North America in favor of its own Mitas and Cultor brands and is doing the same in Europe.

    The company also makes earthmover, industrial, motorcycle, bicycle, airplane and various other tires, but its focus has and will continue to be on farm tires, which comprise 70 percent of its sales, according to Mr. Michaels.

    Market expansion

    “We expect to continue to grow by market share in the United States. That's by a combination of both original equipment and replacement,” Mr. Michaels told Tire Business.

    “In replacement it's as simple as we established a level of distribution in the heartland of the United States surrounding where we have the factory. But we really have not, up to this point, developed distribution in any other areas of the country.

    “Now we've been focusing on that the past couple of years and it's starting to come to fruition for some other parts of the country. So it's really expanding our distribution network. Not necessarily expanding it where we are in the heartland, but expanding in other parts, other markets that we weren't in before,” he said.

    Mitas a.s. photo

    Mitas' AirCell features a dual-chamber inflation system that uses an inner tire, mounted on the rim inside the larger tire and inflated to a maximum of 115 psi and which occupies about 30 percent of the volume of a larger tire, to provide a source of pressurized air to help adjust the psi of the larger, outer tire, Mitas said.

    Those new markets include California, Texas, the Northeast and parts of the Southeast. Mitas expects to grow its presence in those markets and increase its U.S. market share overall through a combination of increased sales and expanded distribution footprint.

    The tire maker operates one mixing warehouse, in Cedar Falls, Iowa, near its factory and relies on distributors to sell its tires. Mr. Michaels said Mitas has no intention of selling directly to dealers. He declined to reveal how many distributors Mitas works with.

    Mitas also is focusing on expanding its distribution in Canada and Mexico.

    “One thing that's going to happen in the coming years in Mexico is that today everything in OE is bias. Tomorrow the original equipment manufacturers are going to change over to radial. So you're going to see the radialization of the Mexican tire market in agricultural tires,” Mr. Michaels said.

    ‘That one is extremely exciting. We hope to be present when that happens. We're present today. The fact that we have a strong radial presence here in the United States only leads us to believe that we will be a strong presence there, as well, as we go forward.”

    Meanwhile Mitas also plans to grow sales in Canada, but he noted that the Canadian tire distribution market is undergoing consolidation, so the company is watching “to see what pans out.”

    Tire innovations

    Mr. Michaels said Mitas has been pursuing tire design innovations, especially for the farm market. Over the past two years, the company has showcased its Pneutrac tractor tire/track concept at various trade shows.

    “Pneutrac is probably the best example of the newest technology that we have…. I liken it to the change from bias to radial. It's that big of an innovation,” Mr. Michaels claimed. “It's the next step from radial to what happens next in tires — it's a significant jump in technology.”

    Mitas doesn't expect tracks to replace tires but insists they offer options once tire designers have optimized everything they can in radial technology to achieve lower compaction, stronger stability and a larger footprint.

    Mr. Michaels said some of Mitas' OE partners are road testing the Pneutrac. He admitted that while tracks offer some unique advantages, they also have issues, such as serviceability and high costs to keep in operation.

    Mitas a.s. photo

    Closeup of the Mitas Pneutrac hybrid tire/track concept.

    “There's a lot of long-standing brands and companies in the ag tire business and, because of that, this (Pneutrac and other innovations) sort of showcases where Mitas is going and that our technology is driving things forward. And there's more to come,” he said.

    Some of Mitas' other new products include:

    AirCell, a dual-chamber inflation system, for its agricultural tires that the company claims can cut the inflation time for a large tire by 90 percent or more. The concept involves an inner tire, mounted on the rim inside the larger tire and inflated to a maxumum of 115 psi, that occupies about 30 percent of the volume of a larger tire, Mitas said.

    The chamber serves two purposes: it reduces the volume of air needed to inflate the larger tire and is the source of the air pressure, via a valve system, needed to inflate the tire. This system enables the farmer to adjust tire pressures more rapidly when moving from field to road, Mitas said.  

    Hans-Ulrich Klose, Mitas' head of automotive engineering, said the AirCell “also provides synergies for the integration of tire inflation systems into the complex structure of high-tech tractors.”

    The first Mitas Aircell on the market, which debuted at the recent Agritechnica trade show in Hanover, Germany, is the Mitas 710/75 R42 SFT with other sizes to follow, the firm said. The development, marketed as “VarioGrip Pro,” earned Mitas a DLG Agritechnica Gold Medal at the show.

    Mitas said operators can raise the inflation pressure of an AirCell-equipped tire by 14.5 psi in just 30 seconds, or about 10 times faster than in a tire without the inner chamber.

    The AirCell-equipped 710/75 will be available for the Fendt 900 Vario starting in November, Mitas said. 

    Super Flexion Tire (SFT) for tractors and harvesters carries the speed designation “D” and has a speed rating of 40 mph. With lower load capacities, the tire permits speeds of up to 43 mph. The SFT can carry up to 12-percent more load than comparable competitive products at identical tire pressure, which does not affect the tire's top speed, the company said.

    SFT offers improved ground handling and increased traction due to a larger footprint while the high absorption tire sidewall offers a comfortable ride and improved driving safety, the company said.

    The SFT line includes the 1250/50R32 SFT, Mitas' largest ag tire with a diameter of 80 inches and capable of carrying loads of up to 35,280 lbs. Last year Mitas started to produce the tire at its Iowa plant.

    Improved Flexion (IF) tire for self-propelled sprayers carries a “D” speed category with a maximum load of 19,290 lbs. Due to its lower tire pressure, the Mitas IF has a larger footprint for less soil compaction and better traction efficiency, the company said. IF tires are produced at Mitas's Charles City factory.

    Very High Flexion (VF) tires feature higher maximum load capacity and lower inflation pressure during cyclic field operation. The Mitas VF 710/70R42 CFO HC 3000 for combines debuted in July. The VF tire's main advantage is maintaining constant tire pressure at any speed, Mitas said. Compared with combine standard tires, the VF tire offers 26-percent less inflation pressure for reduced soil compaction. The tire also has a narrower section width for increased mobility and carries loads of up to 31,550 lbs., the company said.

    Market trends

    “It's been a very difficult year in the farm market,” Mr. Michaels said, partly due to lower crop prices and the 2014 Farm Bill that eliminated direct payments to farmers for revenue shortfalls.

    “The impact has been that sales of original equipment have gone way down, whether it's tractors or combines. Basically their sales are way off and that affected, pretty significantly, the farm tire industry. And certainly there's always the correlation between original equipment and replacement,” he said.

    Mr. Michaels expects the slump to continue into next year.

    The lower crop prices have compelled some smaller farmers to sell off their land to bigger corporate farms — mass crop producers that use large combines and tractors. That trend toward larger equipment with their giant tires means a longer replacement interval for the tires, according to Mr. Michaels.

    “What happens with bigger equipment is generally it's that much more efficient that (the farmers) don't have to use them as much. From the standpoint of tires, they usually don't replace the tires before they sell the equipment. So you don't see a replacement until you have the second, or sometimes even a third, owner of the equipment. So with extremely large rear radial tires, rotation comes later and later,” he said.

    “Eventually you get the sale. The question is with whom and where.”

    As for trends in farm tire development, Mr. Michaels noted that “the biggest trend in the optimized radial is the same trend we've seen in the tire industry overall for years and that's lower, wider, less air pressure, more weight capacity…. It revolves around bigger equipment that's more efficient.”

    “Where you see that heavier equipment is on the larger ‘super' farms and those farms are mostly in the heartland of the country. That's where the technology you see is mostly in effect.”

    _____________________________________

    To reach this reporter: [email protected]; 330-865-6127; Twitter: @kmccarr

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