Marangoni Ready to Move Forward

The Marangoni Village the Italian tyre and retreading systems manufacturer constructed at last year’s Essen show was about more than just combining exhibition space. As far as the company’s management is concerned, this move symbolised the first step in a “redefinition of the Marangoni’s corporate strategy.” In other words, the company is re-doubling its efforts to focus on the synergies available to a group that runs as a “highly networked system” rather than a number of autonomous entities.

Looking at the how the company has expanding internationally over the years, retreading has always been a key part of the group’s business. In fact the company’s domestic Italian market is the only territory in the world where less than half of group sales (40 per cent – see chart for more details) come from retreading related operations. With Western Europe accounting for 34 per cent of total group turnover the half of this figure that is retreading related remains central to the company’s operation.

Last year Marangoni Group turned over some 340 million euros, over 60 per cent of which can be traced back to retreading related activities (see chart for full turnover breakdown). However, as you look further afield it becomes clear that retreading materials, systems and machinery feature as the group’s key international export. Currently Eastern Europe accounts for 11 per cent of Marangoni’s group turnover – and 80 per cent of this is retreading related. This trend is even more marked in the Americas. This region accounts for 15 per cent of group turnover. 90 per cent of this comes from retreading.

Group CEO, Massimo De Alessandri observed that the same market pressures (raw material and fuel costs; changes in the demand and production of tyres) were having a two-tier effect on the market. Mature markets are witnessing retreader consolidation; increased vertical integration and retread production by new tyre manufacturers; and new technical, regulatory and environmental requirements. The new emerging markets, on the other hand, are experiencing a totally different set of circumstances and as such require a quite different approach.

With more than 50 per cent of global truck tyre production being manufactured in BRIC nations (Brazil Russia India and China), the rapidly advancing radialisation process will have a “pull through” effect for truck retreading. In these countries local and established new tyre makers are taking an active role in the process. Marangoni’s strategy until recently was all about observation. However, the news in August this year that Maragoni has set up a sales office in China and has plans to set up retread factories, shows how seriously the company takes the emerging markets.

“It is common opinion that the new markets, especially China, are strongly influencing the rubber industry”, Massimo De Alessandri, CEO of Marangoni Spa, explained. “In the tyre segment, on one hand systems with a significant production capacity have been developed to respond to the general growth in consumption, while on the other the demand for tyres has not yet reached the forecast levels, and consequently there is a surplus in production that is then dumped onto other markets.

“The exponential growth of emerging countries is creating strong demand for the raw materials and the oil required to satisfy the energy needs of the new factories. This has meant increases in the prices of both. In the current situation, tyre manufacturers have potential new markets for their products, yet at the same time, and depending on the specific case, have potential new competitors or partners.”

On the subject of car tyres, De Alessandri explained: “to respond to the changing competitive scenario, we are investing in ongoing innovation and specialisation. In particular this regards the new automated production island that we are testing with the aim of ensuring the maximum quality of our tyres, together with maximum manufacturing flexibility And then, being European manufacturers, we will focus even more on our range of high and ultra high performance tyres, as well as winter tyres.”

Full circle

Last month Tyres & Accessories published details of how Marangoni’s Ringtread technology has been further optimised with help of a 5 million euro investment in the Ferentino plant, which saw the introduction of the RMS (Ring Modular System) project. By fully renewing the plant’s production chain and turning it into an integrated continuous cycle, Marangoni is confident that tyres retreaded with Ringtread rings are able to compete at the same level as new tyres in terms of performance, and beat the new tyre competition in terms of economic performance, energy saving and environmental protection.

The technology also fits in nicely with company predictions that the number of retread plants in Europe will decrease as the average volume-per-retreader increases. Perhaps RMS is also Marangoni’s defence against the increased levels of vertical integration into the retread segment have taken place in the last 18 months?

“These technological innovations” Massimo De Alessandri, Marangoni Group CEO explains, “are part of the ongoing renewal process that allows us to be always up to date and to walk at least one step ahead of the competition. Studying and developing new technologies upstream and downstream of the production process – and as a consequence for the finished product as well – is traditionally part of the DNA of our industrial group.”

After working for over half a century in the tyre sector, the Marangoni group claims the distinction of being one of only a few players in the global tyre industry to be fully active across the spectrum of tyre industry sectors; from the production of new tyres to industrial-scale retreading, from the design to the development of machinery for the production of tyres, from the manufacturing of retreading systems to the distribution of the finished product to end users. These activities, currently carried out by a staff of over 1,800 in 10 production branches in Italy, Germany, North America and Brazil, led in 2006 to a consolidated turnover of 339.8 million euros, a 10 per cent increase compared with the previous year.