Modern Tire Dealer

APR 2019

Magazine for the professional tire industry

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M T D A p r i l 2 0 1 9 40 ers' new tires coupled with the increase in markets across almost every sector is increasing demand for retreaded and used tires," says Hickman, who is president of No. 22-ranked H&H Industries Inc. of Oak Hill, Ohio. LOW-COST IMPORTS ARE STILL AVAILABLE e number one dealer in MTD's rankings, Southern Tire Mart LLC, purchased six retread plants and 46 GCR Tires & Service stores from Bridgestone Americas Inc. in March 2019. John Boynton says Southern Tire Mart's outlook for its retread business is not related to the CV and AD tariffs. "We are bullish because retreading is such a huge cost savings to fleets when it's managed and done correctly. Fleets always have to be looking for ways to keep their costs low. e quality of the products being built are constantly getting better, which makes a better platform for retreading." Boynton joined Southern Tire Mart in October 2018 aer leading the commercial operations at Tredroc Tire Services and Bridgestone. Retreading has always been a core compe- tency for Southern Tire Mart. "We're always looking at ways we can promote and push more retreading because it is such a genuine service to our customers," says Boynton. He does not expect the tariffs to be a game changer. "With some of the market dynamics going on and the raising of the pricing of the Chinese tires, that's going to create a little bit more of an opportunity. But there are other players out there that are not going to be subject to these restrictions, and they're pretty competitively priced." Gary Van Blaricom likewise expects a short-term increase in retreading due to the tariffs because low-priced tires are still available. "We have to remember tires coming out of ailand, Vietnam and India are not subject to these tariffs, so the low-cost TBR tires have not gone away completely," says Van Blaricom, who is president and CEO of Eastern Iowa Tire Inc. "e biggest single reason for retreading being down is the offshore tires and the pricing that comes with them. So I think there will be an uptick in retreading, but I'm not sure at this point whether it's going to be a large change," he says. Van Blaricom is an owner in the Heartland Tire Group, which operates 16 stores and five retread plants in Iowa, Nebraska and Missouri. Heartland, which holds the No. 48 spot in the rankings, operates under the names Eastern Iowa Tire, Garrett Tires and Treads, Heartland Tires and Treads of Omaha, Heartland Tires and Treads of Kansas City, Davis County Tire and Weldon Tire. In addition to the availability of low-cost Chinese tires, Van Blaricom says many people are not retreading because they feel it is more economical for them to run new tires and sell the casing. Ten years ago, retreading represented more than half of his business. Retreading is 22% of his business today, while his sales of imported tires have increased. e tariffs will fundamentally change the supply side of new tires in the U.S., according to Ron Elliott, marketing, communications and inside sales manager for Marangoni Tread North America Inc. "Over the next two years we will see a return to an improved ratio of retreads to new tires sold and put into service in the U.S." Marangoni is expanding its Tennes- see production facility following a year of increased unit sales and growing demand for the XP Extreme Performance line. e new production line is expected to be operating in the second quarter of 2019. "e commercial trucking industry has been on a sugar high for the last several years, bingeing on cheap, low quality and non-retreadable commercial truck tires that are being imported into the United States at below fair market value from China," says Elliott. He is also the spokesperson for Retread Instead, a coalition of retread industry sup - porters that seeks to inform and educate on the environmental and economic benefits of retreading instead of buying, selling and running tires imported from China. "With the tariffs in place, we will now see better quality truck tires that will be more repairable and retreadable delivering lower total life cycle cost and reducing the negative impact on the environment." ACQUISITION RECAP Acquisitions are one way retreaders are adjusting to market challenges. e latest acquisition occurred on April 1, 2019, when No. 9-ranked Bauer Built Inc. bought one retread plant and seven commercial stores from Allied Oil & Tire Co. e prior month, Southern Tire Mart purchased six retread shops from Bridgestone and Rice Tire bought Central Tire's retread plant. In June 2018, Purcell Tire & Rubber Co., the largest OTR tire retreader in the U.S., purchased the Northwest Retreaders Division of NRI Inc., the second largest. Purcell holds the No. 5 spot. In May 2018, Monro Inc. acquired Free Service Tire Co. e purchase included the tire dealer's retread plant, along with 12 retail and commercial stores and four wholesale distribution centers. No. 28-ranked Monro now owns three retread plants. In November 2018, No. 38-ranked Border Tire LLC bought a retread plant and five Tire Centers LLC (TCi) stores in California from Michelin North America Inc. e locations were the last of TCi's assets. Border Tire had previously acquired two TCi locations in Arizona. Border Tire has commercial stores in Laredo and El Paso, Texas; Las Cruces, N.M.; and Tucson and Phoenix, Ariz. e company also has a retread plant in El Paso. In April 2018, Michelin sold a retread plant and three TCi locations in Colorado to Quality Tire Co. Also in 2018, No. 10-ranked Service Tire Truck Centers Inc. (STTC) purchased S&S Tire Inc.'s three stores in Maryland and an Oliver retread plant in Pennsylvania. e stores and retread plant were consolidated into STTC's existing locations and retread plant, according to Walter Dealtrey, CEO and president. In addition, a Truck Tire America Ltd. store in Delaware was acquired and merged into a nearby STTC location. BestDrive LLC, a Continental tire and ContiLifeCycle commercial tire dealer and retreader, opened a seventh retread plant, its first in the state of Texas, in 2018. e Continental Tire the Americas LLC subsid- iary ended 2018 with 31 locations versus 22 at the end of 2017. Expansion included the company's first stores in Texas, Oklahoma, California and Arkansas. No. 24-ranked BestDrive grew 28% year-over-year in sales, T o p 5 0 R e t r e a d e r s TravelCenters of America opened a retread plant in Bowling Green, Ohio, two years after launching the TA Truck Service Commercial Tire Network. COURTESY OF TRAVELCENTERS OF AMERICA

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