Although Italian firm Marangoni celebrated its 50th anniversary in the new millennium, the year 2000 primarily represented a significant milestone on its path towards becoming a global operator. 
Today, 10 years later, the Marangoni Group is, aside from Bandag and the new tire manufacturers’ retreading activities, the industry’s sole genuine “global player.”
The company has not only successfully established itself in Europe and North America, it is now slowly gaining a foothold in China. Howeve,r in the last decade it is the operation in Brazil that has, above all, become the backbone of its global industrial presence.
For Gian Piero Zadra it goes without saying that this claim is more than just a glib statement, in that it can be backed up with figures. Brazil’s retreading market has traditionally been one of the largest markets in the world. In 2008 alone, 7.9 million truck tires plus six million passenger tires were retreaded there, related the managing director of Marangoni Tread Latino America. Last year, admittedly, Brazil did not remain untouched by the recession: the market lost about 10% in terms of volume.
Marangoni – exclusively involved with commercial vehicle tires in Brazil – claims a marketshare of approximately 13%, which equals at least one million retreaded truck tires (2008). This is larger than the entire British market. If the Italian firm can claim to currently take a 13% share of the market, this means the company occupies second place in the industry behind market leader Borrachas Vipal (approximately 33%), a Brazilian company.
Thus Marangoni has very recently overtaken Bandag; according to market observers, the U.S. subsidiary of Japan’s Bridgestone Group has clearly suffered losses in Brazil in recent years and today is holding onto a market share of up to 15% there, way less what it enjoyed upon Marangoni’s entry into Latin America.
Now the time is also right for Zadra, who has built up and led the Brazilian operation from day one and also established a family in that country, to look back and reflect. Not only did Marangoni need to fight for a place within the Brazilian market following its official establishment in 1998 (production at the factory in Belo Horizonte began two years later), it wanted to do this with a product that back then was totally new in Brazil, its Marangoni Ringtread.
Marangoni has been able to establish itself as a price leader and a premium brand, the managing director notes, and already at least 50% of tread production capacity is dedicated to Ringtread manufacture – and this proportion continues to grow. Through this production the monthly capacity of around 1,500 tons is almost totally consumed, informs technical director Marconi Gambogi Alvarnga during a factory tour.
This already very satisfactory share of total production given to Ringtread has come in part through changes in the market, but is also attributable to an untiring effort to generate sales by the Marangoni team in Latin America, which today is comprised of more than 150 employees (including almost 90 in the factory).
Brazil is counted amongst the so-called emerging markets. In recent years its economic performance has so strongly developed that, significantly, road freight traffic has on average grown by 10% each year. As a result, a wave of modernization has washed over truck fleets in this Latin American country; every year some 30% of the heavy commercial vehicles in the Brazilian market are new vehicles.
And what marketing efforts has Marangoni carried out to promote the establishment of Ringtreads in Brazil, Argentina, Chile and the other Latin American countries? In the 10 or so years since the first treads were manufactured in the Belo Horizonte factory, Marangoni has been able to shake off the status of newcomer in Brazil and today supplies a network of 60 Marangoni retreading partners, 10 of which are directly owned by the Marangoni Group.
These partners – as per the basic rules of the "monogamous relationship" – almost exclusively manufacture Marangoni retreads. A good example of these partners the SL-Group, who in total operates four retreading facilities in Brazil. One of these plants is in Campinas, two hours from São Paulo. It first opened in December 2008 and is today considered a model Marangoni operation and is used for training purposes.
The factory was equipped according to the latest technical standards and accommodates both mold- and pre-cure retreading. The maximum monthly capacity of 1,200 tires is currently around two-thirds utilized, with Ringtreads accounting for more than 60% of this production. This, adds Marangoni’s Zadra, corresponds to a proportion typical of what is also expected from other partners.
The remaining production includes Unitread and Precauch treads – both recognized Marangoni brands in Brazil.
The development of such business relationships has, of course, definitely improved Marangoni Tread Latino America’s sales. Furthermore, the technical training of production staff and salesperson education for Marangoni partners has had a very positive impact.
One of the many methods Marangoni has used to demonstrate the technical superiority of Ringtread in comparison with traditional tread is through the use of computer software. One example of this is Tread Manager. With this program, data about all relevant tire activity can be collected. "This is a comprehensive program and we are at present the only ones that offer something like this in Brazil," continues Paolillo.
A further, specialized program is Ring Control System. Using this enables the exact analysis of the performance of a retread (or a new tire) through its working life. "This program is a strategic tool which can be used to gain an advantage for our customer over the competition." Importantly, such programs and other related services are meant “to create a relationship based upon loyalty,” adds managing director Zadra. "The development of consumer confidence requires time, but this is how it is done."
However, Marangoni doesn’t just see itself as a partner for Brazilian retreaders; it also views itself as a partner for the new tire industry there. Since 2008 the company has maintained an arrangement with Continental AG that has placed the exclusive licensing rights to the ContiTread pre-cure retreading brand in Marangoni’s hands.
"ContiTread is therefore fundamentally our fourth brand in Brazil," continues Zadra. It is hoped that by 2013 this new brand will have secured a 2%-3% marketshare. Sales should, the managing director hopes, not only take place through the Marangoni partners, but through Continental commercial partners, as well.
A second new tire industry partnership that Marangoni has operated since the end of last year is that with Pirelli. While Marangoni has produced Novateck brand retreads for Pirelli under an off-take agreement in Europe since 2003, the collaboration to manufacture and distribute Novateck retreads in Brazil is new.
Incidentally, Marangoni is not itself active in the new tire business in Latin America; it however intends to offer its own machinery such as, for example, the Ringtreader. Marangoni’s internationalization there is thus based exclusively upon the business of retreading.
Marangoni management sees that the commercial success of such cooperative ventures will require consistent investment in the company’s own factory. While two Banbury mixers – one with a 160 liter chamber volume and one with 85 liters – are currently installed there, the second of these will this year be replaced with a 180 liter Banbury mixer. Marangoni are investing around 3 million euros in this.
At present Marangoni cannot justify its own R&D department there. Yet while the basic work will therefore be performed in Rovereto, Italy, products are always tailored to the Latin American market. (Tyres & Accessories)
