Nash: Raw and synthetic rubber prices have plateaued, but remain at high levels. During the rise of materials costs, raw rubber went up by as much as 200 percent. Tire manufacturers absorbed the increases, and today you're seeing them try to regain some of their losses with price increases. The price increases have slowed, but there is still a lot of catching up for manufacturers to do when it comes to price recovery.
Question: Will the recently-signed technical support/manufacturing agreement between The Yokohama Rubber Co., Ltd. and Shandong Xingda Tyre Ltd. in China help ease the supply issue?
Nash: This is a new endeavor for Yokohama. When you have a short supply of quality products and you're not able to keep up with the demand, you owe it to your dealers to either build a new factory or work out an agreement with another company to help produce tires. Shandong Xingda Tyre has modern equipment – the factory is under seven years old. The only thing the factory is lacking is Yokohama's OTR technology.
With our technical support and their manufacturing capabilities, it's a win/win for both of us. We're trading technology for products. Shandong Xingda is also in the giant radial business, which means we can accelerate quickly in that market.
Question: Any idea when the tires will start to be produced from that factory?
Nash: The agreement was signed on August 2, so we don't have a specific timetable yet. Our engineers are in China studying the building process and technology needs. This is exciting to us as it moves us closer to our goal of expediting our production to satisfy demand for our product.
Question: Once the factory starts producing tires, where do you think they'll be allotted?
Nash: The products are likely to go global, where demand is the strongest. We are still mass-producing OTR tires at our Japanese Onomichi plant, but it's not able to meet the global demand for OE replacement. The Chinese factory is certainly a step in the right direction. It takes millions of dollars to build 51, 57 and 63" tires, so having the technical arrangement will help us enter the market faster.
Question: Any comments from dealers and end-users on the deal?
Nash: The dealers are excited that it's a Yokohama brand tire and has our technology. With the support of the Chinese factory and the strength of the Onomichi plant, we'll be able to fulfill our obligations long-term, which will strengthen us as a leader in the OTR industry. We've been a major player, and we want to remain an industry leader. Our plan is to continue to offer the best technology, service and educated sales force in the world.
Question: Can you go over some of the recent changes in Yokohama's OTR department?
Nash: We lost an industry icon earlier in the year when Nelson Richards passed away. He was my right arm for 15 years and our national sales manager. A person with that much experience is very hard to replace. However, we've always prided ourselves in having a strong bench. We promoted Mike Baggett to national sales manager to replace Nelson; promoted Tim Easter to director of sales and marketing; and assigned Joe Garcia as manager of OTR sales in Mexico. Combined, these individuals have decades of OTR experience, are dealer-friendly and have expansive dealer network.
Question: What new tires will Yokohama be displaying at MINExpo?
Nash: We'll have three new radial tires, which are the RL45, RB42 and RL51 in our booth (#8271).
The RL45 is very versatile and will run on articulated dump trucks, loaders and underground vehicles. It comes in two sizes: 26.5R25 E2 and 26.5R25 L1. It's a good addition to our line-up of loader radials. In 2013, we plan to add a 35.6533 radial.
The RB42 is designed for dump trucks and comes in four sizes: 18.00R33, 24.00R35, 27.00R49 (with cut-protected compound) and 27.00R49 (with regular compound). Testing has been completed, with the tire slated for mass-production in 2013. It's our first entry into the X-large radial.
Yokohama Tire Corporation is the North American manufacturing and marketing arm of Tokyo, Japan-based The Yokohama Rubber Co., Ltd., a global manufacturing and sales company of premium tires since...