OTR Tire Makers Address Short Supply

At least three of the major OTR tire manufacturers are adding production at their respective plants in an attempt to ease the supply problems that are plaguing OTR tire dealers and end users.

Bridgestone Corp. is boosting production at its OTR plants in Japan.

Michelin North America Inc. is in the process of sinking $85 million into its OTR plant in Lexington, S.C., over the next five years to boost the facility's output by 50%.

Yokohama Rubber Co. Ltd., parent company of Yokohama Tire Corp., also is hiking production in Japan that will enable it to produce 3% more product this year, Gary Nash, director of OTR sales for Yokohama Tire Corp., has told moderntiredealer.com.

Two other OTR tire manufacturers -- Continental Tire North America Inc. (CTNA) and Goodyear Tire & Rubber Co. -- report that their U.S. OTR plants are currently running at maximum capacity. (CTNA builds large OTR tires at its Bryan, Ohio, plant, while the majority of Goodyear brand OTR tires that are used in the U.S. are built at the company's factory in Topeka, Kan.)

"There's no inventory," Tim Good, manager, global accounts, off-road tires, for Goodyear says.

"I hate to say it, but we're almost on a 'just-in-time' (delivery) basis."


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Big tires, little supply: OTR tire shortage remains severe, despite plants operating full out

By Miles Moore
Rubber & Plastics News Staff

A severe global shortage of large off-the-road tires caused by soaring demand in China, Russia and Indonesia will continue in 2005.

That´s the opinion of tire manufacturers, who are working flat out to meet demand, and dealers who find themselves on allocation. "There´s no less supply--every OTR tire plant in the world is running 24 hours a day," said Manny Cicero, vice president of OTR sales for Bridgestone/Firestone. "It´s all a function of exploding demand."

OTR tire demand increased more than 20 percent in 2004 from 2003, according to Todd Ramsey, director of marketing for Michelin Earthmover at Michelin North America Inc. "This demand is unprecedented in the history of the industry and was unanticipated by the industry," he said.

Goodyear agrees growth in OTR consumption in 2004 prompted the shortage. "From our standpoint, it was a result of increased demand, domestically and overseas," a Goodyear spokesman said.

OTR manufacturers aren´t even taking new orders now, dealers across the U.S. reported.
"We´re on allocation with everybody," said Terry Sparks, president of Sparks Commercial Tire Co. in Findlay, Ohio. "We have people calling us from all over, but unfortunately we can´t help them. We´re OK right now, but in 45 days I don´t know what we´re going to do if we don´t get more tires."

The shortage is starting to hurt mining, construction and other companies right down to the lowest-level employees. "If a mining company has to park a piece of equipment because it can´t find tires for that equipment, that takes the operator off the job right there," said Edward L. Johnson, sales and regional manager for Hudson Co., an OTR tire dealer in Hazard, Ky.
Bull market causes shortages

A tremendous increase in demand for minerals--especially coal, iron ore, copper, nickel and bauxite--with no matching increase in OTR manufacturing capacity is behind the OTR tire shortage, according to Otraco International Pty. Ltd.

"The demand for these commodities has been driven largely by the surge in development in China and, to a lesser extent, Russia and India," Otraco, a provider of OTR tire management services, said in report issued by the Australian firm in 2004.

OTR tire makers and dealers second that assessment.

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