Production starts at Giti U.S. plant

RICHBURG, S.C. — Giti Tire Group has initiated production at its $560 million Richburg tire plant, making Singapore-headquartered Giti the 16th global tire maker with U.S.-based manufacturing capacity.

The plant's initial production is focused on Dextero-brand car tires for Wal-Mart Stores Inc., but the company is preparing to add GT Radial-brand production yet this year and launch a range of Giti-branded tires starting in 2018, Giti Tire (USA) Ltd. executives said during ceremonies held Oct. 4 to mark the start of production at the 1.7 million-sq.-ft. plant and distribution center.

South Carolina Gov. Henry McMaster and Wal-Mart Stores President and CEO Greg Foran were on hand along with other state, regional and local officials and plant supplier representatives to help mark the milestone.

An official plant opening ceremony is planned for next year, when OEM and dealer customers will have a chance to tour the facility.

The factory, plans for which were announced in mid-2014, is scheduled to produce up to 200,000 Dextero-branded passenger tires for Wal-Mart this year, company officials said.

Production should ramp up to several million passenger and light truck tires in 2018, then to the plant's first-phase nameplate capacity of 5 million tires.

The factory's physical layout can accommodate a doubling of that capacity to 10 million tires "as demand warrants," according to Hank Eisenga, vice president, manufacturing and plant manager.

In his prepared remarks for the event, Giti Tire Group Chairman Enki Tan said his firm's investment in the plant "demonstrates our firm commitment to North American customers."

He lauded the "extensive infrastructure network" in Chester County, S.C., and a commitment to a highly skilled workforce for help to create a world-scale plant in rural South Carolina.

'America at Work'

Mr. Foran and a team of Wal-Mart executives headlined the event, which in part commemorated the retailing giant's "America at Work" initiative to solidify its relationship with U.S. suppliers and supply of U.S.-sourced goods.

In his remarks at the event, Mr. McMaster called the ingenuity, innovation, strength and determination exemplified by the Giti-Wal-Mart collaboration "off the scale."

Dr. Tan noted that Giti is the largest Wal-Mart supplier to date to have partnered with the Arkansas retailer in its America at Work initiative. He said his company's project in South Carolina thus far has involved more than 5,000 workers and will generate an estimated $1.2 billion in economic impact in the state.

State, regional and local governments committed more than $40 million in economic incentives toward the project in Chester County, about 40 miles south of Charlotte, N.C.

Wal-Mart has sold Dextero-brand tires at its Walmart auto care centers in the U.S. since 2012. Giti plans to shift that supply steadily to the Richburg plant from the Indonesian plant of its P.T. Gajah Tunggal affiliate, starting with the DHT2 and Touring DRT1 passenger lines.

"By investing in products that support American jobs, we were able to bring products to our shelves that our customers want and new jobs to the communities we serve," Mr. Foran said. A Boston Consulting survey estimated the Wal-Mart initiative will create 1 million new jobs in the U.S.

The South Carolina company, Giti Manufacturing (USA) Ltd., has about 200 employees working now and plans to have 400 by year-end, 1,000 by year-end 2018 and 1,700 at full capacity.

Giti also supplies Wal-Mart with tires for store operations in Brazil and China and is evaluating the feasibility of extending that relationship to other markets, Wal-Mart executives said.

Mr. Foran noted that Wal-Mart's association started several years ago when his company approached Giti about supplying up to 500,000 "opening price-point" tires to Walmart stores in the U.S.

Unlike other companies that often need weeks to respond, "Giti literally came back to us in less than four hours and said they could do it… . It was settled with a handshake."

Julianto Djajadi, executive vice president of business operations for Rancho Cucamonga, Calif.-based Giti Tire (USA), stressed that a fundamental reason for building in the U.S. is speed to market, noting that it can take 70 to 90 days now to fulfill orders from the company's Indonesian or China plants.

The manufacturing company said it works closely with York Technical College in Rock Hill, S.C., to recruit and train workers for the factory and has initiated a Math & Science Award with the Chester County School District to foster interest in the school system's STEM (science, technology, engineering and math) programs.

Mr. Eisenga — who joined Giti in 2015 after five years with Goodyear and a dozen with Continental Tire the Americas — said the Richburg plant is the most advanced technologically of Giti's eight factories worldwide, but stopped short of calling it fully automated.

"We're striving for a balance between technology and the human element," Mr. Eisenga said, noting that the key difference is striving for an optimum workflow.

Hamad Aboutorabi, director of Giti's Research & Development Center in Uniontown, Ohio, likened it to a symphony orchestra, saying the instruments — or in the case of a factory, the equipment — can't play themselves. They need skilled players and a talented director.

The plant uses an array of state-of-the art processing equipment, including a half-dozen VMI Exxium single-stage tire building machines and 48 curing presses from Taiwan's Seyen Machinery Co. Ltd., with a dozen more being prepped for installation.

VMI Holland B.V. states the Exxium building machines are capable of handling rim diameters up to 24 inches with a building cycle of 40 seconds for a typical passenger tires, yielding a daily output of up to 1,600 tires.

The plant has its own rubber compounding capacity on site.

In his remarks at the event, Dr. Tan noted that Giti Tire is involved in an initiative with Conservation International to ensure that the company's carbon emissions are offset through the planting of nearly half a million trees and other measures, along with electricity and water-conservation efforts.

VW fitment

Giti Tire (USA) recently disclosed it had earned an original equipment fitment with Volkswagen of America for tires that will be manufactured at the new plant.

VW will fit its 2019 Passat being assembled in Chattanooga, Tenn., with the premium all-season Giti ComfortA1 in sizes 235/45R18 95H and 235/40R19 92H.

Singapore-headquartered Giti Tire Group is the world's 11th largest tire maker, based on 2016 sales of $3.03 billion, according to Tire Business' annual global tire rankings.

Giti officials declined to share specifics as to how the new Giti brand will be positioned vis-à-vis the GT Radial brand, but noted it will be the company's OE brand and stressed that up to now the company hasn't sold a corporate "namesake" brand in North America. The Giti brand is sold in other markets internationally, however, such as Brazil and China.

Giti Tire USA also is formulating a new brand image campaign and independent affiliated dealer sales/marketing program, according to Kenny Lee, senior director of marketing, North America, but the company's executive team declined to share specifics of either for now.

In the words of Armand Allaire, executive vice president of sales, "Stay tuned."