Marangoni establishes new Corporate Center in Rovereto

For more than a year the Marangoni Group has operated its retreading business out of a central holding company. The Italian retreader also recently established a new corporate headquarters at its Rovereto site and consequently closed its centre in Verona. These actions were taken in response to structural changes within the market that necessitate increased speed and responsiveness. In an interview with Tyres & Accessories, Marangoni Group CEO Massimo De Alessandri explained the company’s current position in terms of its consolidation, the motivations driving it and the future facing those parts of the company not belonging to its retreading business.

Tyres & Accessories:
Have the companies Marangoni Pneumatici – which produces retreaded truck tyres – and Marangoni Tread – which produces retreading material – merged or have they been merged into the holding company?

Massimo De Alessandri:
Marangoni Pneumatici and Marangoni Tread have been merged into Marangoni Spa. Therefore today Marangoni Spa is directly involved in the management of our European retreading, commercial and industrial tyre operations and controls all the remaining European and overseas companies.

Tyres & Accessories:
How are your subsidiaries in Germany, Brazil, USA and Sri Lanka affected by this merging of companies?

Massimo De Alessandri:
Administrative and control related activities plus other processes have been streamlined, simplified and concentrated, but the management of the different businesses related to these subsidiaries, such as Retreading Systems and Industrial Tyres, is still carried out by the respective divisions.

Tyres & Accessories:
Was Ellerbrock legally a subsidiary of Marangoni Tread rather than of the holding company?

Massimo De Alessandri:
Yes, in the past it was a subsidiary of Marangoni Tread; today it is controlled by Marangoni Spa.

Tyres & Accessories:
What was the most important reason for Marangoni to merge the companies and their respective activities?

Massimo De Alessandri:
To simplify corporate structure, concentrate several processes formerly located in different places, reduce costs in functions and activities that were duplicated because of the former corporate structure and develop synergies through more frequent and open interactions between our staff.

Tyres & Accessories:
How important a reason was cost cutting? How have costs been cut?

Massimo De Alessandri:
Reducing costs was important from the beginning and became even more relevant later on due to the impact of the great recession and its effects. All functions and activities have been subject to a review and to some restructuring, even if at different levels, and the process is still continuing; the creation of a unique Corporate Center will facilitate additional undertakings.

Tyres & Accessories:
To what extent is this step of merging companies a reaction to market developments?

Massimo De Alessandri:
Tyre retreading is becoming ever more important around the world, new players are making their presence increasingly felt and new challenges, mainly related to rising raw material prices and environmental requirements, have arisen. The possibility of coordinating and developing our European and global activities from one main Corporate Center that is in direct contact with front line operations, whether they be in Latin America, in North America or in Northern Europe, will enable the group to respond with increased flexibility and agility to these changes and challenges.

Tyres & Accessories:
Will your internationalisation be affected by this merger?

Massimo De Alessandri:
Yes, it will even be accelerated, because in parallel with the simplification of our central structure we are reinforcing our presence in the different markets in order to have specific resources and capabilities where they are required, and not necessarily in Rovereto.

Tyres & Accessories:
How are the activities of your former separate entities being merged? Please give some examples where changes in day-to-day operations have occurred.

Massimo De Alessandri:
Speaking of day-to-day operations, today a single company performs the administrative and governance activities of the former three Italian companies, and meeting with company representatives has been simplified as almost everybody is located in Rovereto.

Tyres & Accessories:
How will this affect product quality at various levels?

Massimo De Alessandri:
Every process that simplifies and shortens the value chain both outside and inside the company generates advantages for the customer. Joining together resources and competencies previously in operation at separate locations, and in certain cases with different agendas, shortcuts the development of solutions; this applies to both our direct and indirect retreading business.

Tyres & Accessories:
How will this affect your product line-up?

Massimo De Alessandri:
Having the possibility to look at all our product ranges from a joint, even unique perspective will generate insights and goals that were previously more difficult to consider and to achieve.

Tyres & Accessories:
Have responsibilities within your management also changed?

Massimo De Alessandri:
The business and operational management of our retreading activities in Europe has not changed. Mr. Zadra [Gian Piero Zadra is managing director of Marangoni Tread Latino America in Brazil; T&A] will oversee a number of new international projects and developments but he will continue to oversee our operations in South America.

Tyres & Accessories:
Marangoni the retreader is a competitor to its own material customers; after the merger this has become even more apparent. How do you guarantee your material customers will receive equal treatment as your own retreading business?

Massimo De Alessandri:
Intra-company competition is a subject affecting most companies in the automotive and tyre business in various ways, such as in relation to brands, products and company owned versus franchised distribution. In our case several elements that make real conflicts very rare if not completely absent should be taken into consideration: With the exception of the Italian market, where the fragmentation of both the retreading and the retail markets and the variety of local requirements justify a dual approach, there are very few cases where internal competition is critical and in most cases the experience and the capabilities of our local management prevent negative synergies while actively pursuing positive ones. The best guarantee we can offer our retreaders is that by being directly involved in their business we can fully understand their daily problems and requirements and can share solutions for overcoming these. This is something not every supplier can offer.

Tyres & Accessories:
Will there be more such mergers in the Marangoni group?

Massimo De Alessandri:
Mergers and demergers and organisational changes in general are business tools that will by necessity be used more and more in the years to come in light of the pace of change taking place as a result of environmental and competitive factors.

Tyres & Accessories:
Marangoni points out that it holds an advantage in that it is also an important market player in other tyre businesses, such as in new tyre production, machinery production and retail tyre trade. But how exactly is Marangoni’s retreading business being affected in a positive way by – say –new tyre production or the tyre trade?

Massimo De Alessandri:
For more than twenty years our presence, even when to a limited extent, in the upper and lower stages of the tyre value chain has represented a very important source of innovation both in the development of our products and of our process technologies, as demonstrated by the global success of the RingTread System. In reference to our car tyre business and Italian retail operations, both these activities exploit their synergies at group level in various ways that are more related to the management of our domestic and European market presence and the relationship with other parties associated with our business system.

Tyres & Accessories:
Wouldn’t it make sense to focus upon what Marangoni today mostly represents, an area in which Marangoni is regarded as one of the global market leaders – retreading?

Massimo De Alessandri:
Currently unfolding global developments mainly focus on the tyre retreading and tyre machinery businesses as both these activities face attractive market conditions and have a strong competitive position. The percentage of total turnover and profitability made in each of these sectors has grown over the last few years.

Tyres & Accessories:
Will Marangoni retain its new tyre business or are you going to divest it?

Massimo De Alessandri:
The size of our new car tyre business clearly represents a challenge but it is also a strong driver towards efficiency within our Italian plant and to qualify our products, our technologies and our relationships with the European aftermarket and with some important players. Regulatory and environment related changes will present new opportunities for an established and dynamic European car tyre manufacturer like us and we will of course be pleased to reinforce Marangoni Tyre’s position through the establishment of additional and stronger partnerships.

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