Yokohama TWS eyes more growth in North America

WAKEFIELD, Mass. — Tire dealers and OTR tire customers can expect little outward changes as Trelleborg Wheel Systems transforms into Yokohama TWS, following completion of its acquisition by Yokohama Rubber Co. Ltd. in May.

"We've been very busy the last few months preparing for this step and now, finally, we are part of the Yokohama Group, and we are one of the divisions of the off-road tire segment," said Paolo Pompei, former president of Trelleborg Wheel Systems who is now in charge of Yokohama TWS.

"We are entering a group where we can speak the same language and share the same vision, the same value, and we share the same problems and opportunities at the same time," he told Tire Business.

Yokohama has no plans to merge TWS with its Yokohama Off Highway Tire America Inc. business, which distributes Alliance-, Galaxy- and Primex-brand OTR tires.

"For one simple reason," he said. "Together we represent one of the top players in off-highway, but we operate differently, with a different customer base and different market needs.

"We want to keep this business model because we believe that with this business model we can maintain a strong focus on the different brands, on different channels. And clearly any customer, any user can select now from our wide product portfolio and our wide brand choice. … So there is no plan to merge the two entities."

Yokohama TWS builds and distributes Trelleborg-, Mitas-, Maximo- and Cultor-brand tires for the agriculture, construction, material handling and two-wheel markets.

"The market is made up of different end-users who have different needs and support different applications, …" Pompei said. "There is a different value-proposition of any brand we have available in the market and this is making Yokohama strong, extremely strong, because basically we have an answer for any different application that is existing in the market.

"We believe it's complex, but if you look at many other industries, (such as Volkswagen group with its multiple brands) you realize that our job is in some way much more clear and selected when we talk about our brands portfolio."

Pompei said the North American market accounted for about 25% of Trelleborg Wheel Systems' sales, or roughly $325 million, following increased growth the last few years.

"We will keep growing in North America. We see North America as one of the biggest growth opportunities for us because, basically, we're entering a new market offering premium solutions, in particular in agricultural segments."

He noted the agriculture market has been short on tires in the last few years. "We're in the right place at the right time with our product and services."

TWS operates two plants in North America — in the former Mitas Tires factory in Charles City, Iowa, and the Trelleborg Wheel plant in Spartanburg, S.C. — which help support TWS' "local for local" strategy, Pompei said.

"Our business model is based on 'local for local' — being local, supporting local customers with local manufacturing facilities, local warehouses with local people in the field," he said.

Trelleborg expanded capacity at the two U.S. plants last year and now plans to add additional capacity, especially in Spartanburg, he said, with new products, new efficiencies and automation and more sustainable materials.

"We will keep investing in those two factories to support our growth in the North American market."

Yokohama now has tire manufacturing capacity for off-highway tires in all the populated continents, Pompei noted.

"There is no one single competitor in the market today who is able to replicate our set-up. This is making us extremely strong, being part of Yokohama, and giving us the opportunity to leverage the manufacturing footprint, not only to achieve synergies but also to grow in many new markets, like Asia for instance, where we have tremendous opportunities and where there will be probably an additional 2 billion people by 2055," he said.

Yokohama TWS' global plan is to increase the amount of biomaterials and recycled materials in its products, Pompei said.

"Sustainability is really an important pillar of our development," he said.

"What we do globally is all about increasing the productivity and efficiency of our customers in a sustainable way. So we want to deliver products that are able to reduce the operating costs of our customers, to give them the possibility to make extra money.

"Spending more at the beginning on a product that is premium and a little bit more expensive, but at the same time giving them the opportunity to save a lot of money in the long term, by operating with our tires. So this is what they should expect from TWS and this is what is the base of our business culture," Pompei said.

"This is really what is moving our research and development activities. It's, 'How can we deliver more, utilizing less resources?' Less resources not only in the material we're using in our own products, but less resources used by the customer, meaning fuel for instance, working time, in order to be more efficient and to be more effective.

"This is our promise to the dealers in the North American market. This is our promise, in particular, to the users to give them the possibility to be more productive and more efficient long-term with a product that is fully sustainable and eventually, long-term, fully recyclable at the end of its life."

TWS is continuing to pursue advances in "intelligent tires" that can inflate or deflate based on terrain conditions and load data from the connected equipment. Pompei said TWS is working closely with its OEM customers to equip ag machines with intelligent tires.

"In the last 100 years we were focusing a lot on tire design. We were focusing a lot on tire construction. We were focusing a lot on increasing the possibility to carry additional load. This is still ongoing. This is obviously still our main mission: How we can optimize the design and make sure we optimize the structure of the carcass.

"But the real challenge, the real innovation, is all about connectivity and materials. Connectivity is about delivering an intelligent tire that adapts to the working conditions. And materials is about building a tire that has no environmental impact. Building a tire that is fully recyclable, building a tire that has an extremely high content of bio-material," he said.

Yokohama TWS has a goal to be carbon neutral by 2035, he noted.

"This is really an ambitious target we have, but it is something that is making all of us extremely proud because, obviously, it's an exciting challenge that is affecting our future generations. So obviously we feel responsible for them as well."