QUINCY, Ill.Titan International Inc. has secured rights to make and distribute Goodyear-brand farm tires in Europe, the Middle East, Africa, Russia and other Commonwealth of Independent States countries, allowing Titan to pursue what its top executive claims is at least $100 million in potential sales.
Titan already owns the rights to sell Goodyear farm tires throughout the Americas.
Goodyear retains the rights to the Asia market.
Titan will pay Goodyear a licensing fee of 2 percent of sales for the rights, including an up-front payment of $1 million, according to Titan Chairman and CEO Maurice Taylor. Goodyear phased out its farm tire business in Europe in 2014 after failing to reach a deal to sell it to Titan; it closed a plant in Amiens, France, as part of that decision.
The pact with Goodyear also allows Titan to distribute and sell, as well as manufacture farm tires in parts of the licensed territory outside the European Union. In addition, Titan said it has purchased certain Goodyear molds and other assets located in Poland, Turkey and South Africa and intends to transfer them to its factory in Volgograd, Russia.
Goodyear attempted to sell the European farm tire business to Titan more than once during a three-year period, from 2009 to 2012, without success.
At that time, Mr. Taylor estimated the Goodyear farm tire business had the potential to generate up to $400 million in annual sales.
Mr. Taylor said the company is very excited to expand upon our existing licensing arrangements in North America and Latin America to now include licensing of the Goodyear-brand farm tires in these additional, important agricultural regions.
From the time when Goodyear exited EMEA (Europe, Middle East and Africa) farm tire business in 2014, Titan has suffered the loss of business relating to new equipment being exported from North America to Europe. In fact, we estimate over $100 million in U.S. sales were lost.
Titan will work to get all that business back plus more, but it will take time, Mr. Taylor said. This agreement puts Titan 'back in the game' and significantly expands our footprint, market strength and visibility with Goodyear-brand farm tires in EMEA region.
Mr. Taylor called the agreement a positive for all of our existing tire facilities as they support production of the Goodyear-brand as well as the expansion of Titan's LSW (low sidewall) technology to these new regions.
We plan to add manufacturing of Goodyear-brand farm tires to our facility located in Russia to go along with our existing production in the U.S. and Brazil.
By adding production to our Russian facility, it will enable us to provide our customers with a very competitive product offering in these new markets.
The agreement also will allow Titan to add to its unique competitive advantage by offering complete tire and wheel assemblies to customers within the markets it serves, he added.
In the region, Titan has wheel plants in Italy and Turkey to support the tire business.
Quincy-based Titan bought Goodyear's North American farm tire business, including a plant in Freeport, Ill., in 2005, and the Latin American farm tire business in 2011, paying approximately $98.6 million for the Latin American business, which included a plant in Sao Paulo.
In 2014 it paid Goodyear $14.1 million in royalties to cover licensing contracts.
Earlier this year Titan restarted production of Goodyear-brand ATV and UTV tire designs at its Freeport plant for the first time since 2009. The movein line with an agreement with Goodyear signed in August 2014included run-flat versions of the tires for the first time.
The expansion of the Goodyear-brand farm tire licensing covers more than 100 countries through the regions identified earlier, stretching across Europe from Ireland to Russia and throughout the Middle East/Africa.
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