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Record-Setting TIA OTR Conference Delivers Vital Market Data, Trends

March 12, 2012
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Records are made to be broken, they like to say, and since TIA enhanced the educational and networking opportunities afforded by its annual OTR Tire Conference, attendance records seem to fall every year.

The 57th annual conference, held at the Westin Mission Hills in Rancho Mirage, Calif., drew a record 495 dealers, retreaders and suppliers for the Feb. 15-18 event. The 2011 OTR Tire Conference, held in Miami, drew 443 people, which at the time was the second-largest conference in attendance.

Morry Taylor, Titan International chairman and CEO, returned as the OTR Conference's keynote speaker.

And those delegates in attendance this year had more face-time with colleagues and vendors than ever before, plus access to three additional educational seminars that were on this year’s agenda.

Filling the afternoon of the second day, which historically had been left as free time for delegates, the well-attended educational break-out sessions probed customer relationship management, an insider’s look at OTR tire retreading, and a review of new elastomer reinforcement technology that can save producers and retreaders on raw material costs.

Opening the three-day affair, TIA president Larry Brandt updated delegates on the Earthmover Tire Service educational modules, which are currently being translated into Spanish. The translated workbooks and other materials should be ready by the end of the first half of 2012, he said.

Brandt also offered that TIA remains committed to the OTR Tire Confer­ence, and has made it a priority to continue improving the program offering. “We recognize that the OTR market continues to thrive even as other segments falter,” he said.

Executive vice president Roy Little­field welcomed all attendees, particularly RMA president and CEO Charles Cannon. Littlefield said it was a “top commitment” to improve relations between TIA and the RMA. He re­counted how the two groups worked together on recent state-level tire aging legislative issues, and noted “the amazing things that we can do together when we can and where we must speak with one voice.”

Cannon said he was there at Brandt’s invitation and had met with TIA’s executive committee earlier that day. He said there has been a high priority placed, both within the RMA and TIA, to “make sure that we are speaking with one voice on those issues where we agree, and that is the vast majority of issues.”

“We have had for a couple of years a mandate to do this,” Cannon said, “and I think Larry is holding us to perform. We see that we can indeed work together to pursue the common best interests of our member companies and their customers.”

TIA treasurer and events chairman Tom Formanek, of Stellar Industries, formalized plans for the 2013 OTR Tire Conference, which will be held Feb. 20-23 at Gran Melia Golf Resort in Rio Grande, Puerto Rico. Reservations are now being taken for rooms, some of which have a beach view. Retired PGA star Chi Chi Rodriguez, Formanek noted, will offer the annual motivational speech and will be on hand to see foursomes off the first tee of the annual golf tournament at the Trump Interna­tional Golf Club.

Market Details
The highlight of every OTR Tire Conference is a presentation concerning the state of the segment, including a rundown on unit shipments and market outlook. For the 2012 conference, that presentation was given by Angie Jones, Bridgestone Americas general manager of mining and strategic services. Her detailed presentation included projections of how the tiremaker forecasts the market’s future.

According to Jones, the U.S. industry has seen sharp unit sales growth over the last three years, selling 163,508 OTR tires in 2009, 232,760 units in 2010 and an estimated 294,641 tires last year. She defined OTR tires as construction, aggregate and mining equipment tires with 24-inch wheel diameters or larger.
Of those totals, OE sales represented 22% or 35,972 units in 2009, 33% or 76,811 tires in 2010, and 41% or 120,803 tires last year. OE OTR unit sales for 2011 were nearly four times that of 2009.

Conversely, according to Jones, replacement tire sales also saw growth, but at a far slower rate. Replacement OTR unit sales in 2009 sat at 127,536 tires, 2010 sales at 155,950 tires and 2011 is expected to come in at 173,838 tires.

Obviously not every tire in the segment is the same, and it’s no different when it comes to sales value. Jones showed that for 2011, replacement market construction tires represented 75% of units sold, but only 30% of the sales dollars. Mining tires, on the other hand, were just 10% of the units sold, but 51% of the sales dollars. Aggregate tires were 11% of the units sold and 18% of the dollars, and “Other OTR Tires” were 4% of units but only 1% of the sales dollars.

Jones said indicators are that the economy is recovering, and that manufacturing growth, improved employment picture, stronger wholesale and retail sales, and continuing GDP growth are all positives. Still, she warned, the financial crisis in Europe and the economic slowdown in China are putting pressure on the recovery rate.

Tire demand remains strong, and global competition for tires is keeping supplies tight, Jones said. Available tire plant capacity is in full use, but demand is far exceeding production. New capacity will be coming on-stream over the next few years, and still more may be forthcoming from other countries.

Event Highlights
The first day sessions included the annual OTR tire manufacturer panel session, which featured Shawn Rasey of Bridgestone Americas’ OTR unit, Roger Lucas of Michelin North America’s earthmover tire group, James Wang of Techking Tires Ltd., Paul Hawkins of Titan Tire Corp., and Mike Baggett of Yokohama Tire Corp’s OTR unit.

By and large, the new tire producers said they expect tire prices to continue their climb, driven by raw materials – oil, natural rubber and carbon black, in particular – and energy costs. Some even see $5 per gallon for gasoline this summer due to anticipated oil price fluctuations.

Rounding out day one, Formanek and John Collins, president of Amer­ican Crane, gave an instructive presentation on service truck air compressor options and performance requirements.

The second day opened with an update on the challenges of recycling OTR tires, given by Robert Czukor and John Rollins of Tire Recycling Con­sultants. Czukor noted that, “the recycling of OTR tires is really almost non-existent.” The U.S. EPA is starting to look at the situation, “but the problem is the size of the tires makes it difficult to handle them, and the types of rubber compounds used are different than consumer and truck tires, so finding markets for that rubber is hard.”

Titan International chairman and CEO Morry Taylor, who made quite a splash a few years ago when he first keynoted the OTR Conference, garnered a full house for his return visit this year. The Titan chief kept most of his comments focused on his company’s growth and future plans, and offered a few select thoughts on the 2012 presidential race.

For 2012, Titan will continue working on a three-piece 50x56.5-inch wheel, and plans to add some 20 new tires or new sizes, he said. Recently ac­quired from Goodyear, Titan’s tire plant in Brazil will come on-stream this year, he said, giving the tiremaker a footprint in South America and added production capacity. And, Taylor said, Titan is continuing to pursue a purchase of Good­year’s ag tire plant in France, a deal that fell apart late last year.

Launched last year, Titan Mining Services, said Taylor, is a chief priority. Taylor said the goal was to provide tires, wheels and tracks, plus all of the necessary support services, to customers around the globe. Titan will buy or buy into any dealer willing to partner to deliver “consistent professional and comprehensive service to OTR tire customers.”

Taylor said Titan will likely reach $1.4 billion in 2011 sales, plans to be a $2 billion company in 2012, and a $3.5 billion company within 18 months.

As for the election, Taylor said little, but was succinct: “If in September, (President) Obama is up in the polls by five points, personally, I’d liquidate everything I had in the market because the stock market is going to tank un­like anything you have ever seen.

“Cash is king and that’s where I’m going,” he said, predicting, “If it’s five points the other way, the Dow will crash through 15,000 and everything will be great.”

A panel discussion by OTR retreaders, moderated by Jim Smith, editor of Tire Review, followed, and included Mike Berra Jr. of Community Tire Ret­reading, Brain Hayes of Purcell Tire, Dennis Bull of BR Retreading, Jim John of Shrader Retreading, Noah Hickman of H&H Industries Inc., Scott Ragan of RDH Tire & Retread Co., and Ken Sam­borsky of Kal Tire. The panel addressed a wide range of topics, including customer expectations, new equipment and technology, and, of course, the impact of rising raw material costs.

The final morning session included a government affairs update by TIA’s Littlefield, who looked at key tire-related issues, as well as the upcoming congressional and presidential elections.

Closing out the program was a motivational talk by former Marshall University football coach and College Football Hall of Fame inductee Jack Lengyel, best known for having the daunting task of rebuilding the Thun­dering Herd football team after the tragic plane crash of November 1970. The crash and the aftermath were depicted in the movie “We Are Marshall.”  

To view exclusive photos from this event, click here.