Agricultural
They say that you never see a satisfied farmer. What about agricultural tyre manufacturers and distributors – what sort of year has it been for them? We take a look at the factors affecting the agricultural tyre market and some of the latest products available. We also get the views of those who attended the biggest UK agricultural event, the Smithfield Show.
If everything in life went according to plan or the way it was once written down in the corporate strategy books, then the production of agricultural tyres would have been abandoned long ago. Already way back when Messrs. Haverbeck and Borgmann were board members, there were such angry arguments about the distribution of costs that closing down production looked to be a foregone conclusion. Eventually, however, they changed their minds and production of agricultural tyres continued, even though there was next to no money to be made from it. Closing down production would have cost the corporation even more and so it opted for the lesser evil, but for the company’s dedicated agricultural tyres there was virtually no scope for future growth. And yet in this new millennium the German corporation is one of the few truly serious suppliers in this highly specialised field. In an interview with NEUE REIFENZEITUNG in August 2002 in Otrokovice, Werner Flebbe, head of the agricultural tyre sector at Continental AG, and Thorsten Bublitz, head of corporate marketing and distribution of agricultural tyres, admitted that up until 1995 the company did not exactly cover itself with glory – and yet, in the same breath they were able to add that the largest and most modern agricultural tyres demanded by the industry are now built in the Czech Republic. And the price ratios are now ‘OK’. What is more important, according to Werner Flebbe, is that the major Original Equipment suppliers are now strongly interested in co-operating with Continental.
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The new Managing Director at the Goodyear Technical Centre in Colmar-Berg, Luxembourg (GTC*L) is Jean Bergh (59) after the retirement of Theo Famulok. Famulok has headed up the 900 technicians at Goodyear’s R & D centre since 1994. 900 technicians in Luxembourg develop car, truck and agricultural tyres for Europe as well as for the Asian and African markets.
Titan International has published its 2001 financial results. In the fourth quarter, Titan’s net sales were $100.6 million (Q4 2000: $113.4 m). For 2001as a whole, sales were $457.5 m ($543.1 m). The net loss for Q4 was $21.5 m ($8.0 m) and Titan turned in a net loss for the year of $34.8 m, compared to a net income in 2000 of $4.5 m. President and CEO Maurice Taylor Jr. described 2001 as “difficult for all manufacturers.” On the positive side, Titan settled two long-running (39 months and 40 months) labour disputes and received approval to offer agricultural tyres and wheels through the Case New Holland dealership network.
Michelin wants to underline its reputation for innovation concerning agricultural tyres with the presentation of three new tyres: “MACHXBIB”, “XM 28” for tractors exceeding 180 horse power and the trailer tyre “CARGOXBIB”. The first one comes in two versions: an on-land version (650 mm wide) for transport and for work along the furrow and the in-land version (900 mm wide) with significantly reduced soil compaction and excellent traction performance. Highlight on the Kleber stand is the new “FITKER” a 70-series tyre that will be available in the two dimensions 480/70 R28 and 580/70 R38, and which replaces its predecessors, the “Super 8L” and “9L”.
With the new “Ypsilon” tyre, which was shown for the first time at Agritechnica in Hanover, Continental is breaking into the 22.5 inch tyre sector. The Ypsilion combines all the benefits of implement and MPT radial tyres and is approved for speeds of up to 90 km/h (56 mph). Its all-round suitability means it can be fitted not only to trailed axles but also drive axles. In addition the new, revised Technical Manual comprising of over 100 pages has been published to coincide with Agritechnica. It contains a wealth of information about agricultural tyres, their tread patterns, tyre pressures and application conditions.
Uniroyal is well-known for passenger and truck tyres. Now the brand, part of the Continental group, is trading under the name Uniroyal Agro in the agricultural tyre segment also. The exclusive distributor in Germany is Meyer Lissendorf, and negotiations are on-going regarding distribution in other European countries.
Over the last 20 years, agricultural tyre business has not been very important for the Continental group, and at times, the whole segment was in question. Later they got over this with off-take-agreements, when Eastern European companies were allowed to produce tyres with the logo of the prancing horse, in order to maintain market representation. Has this all gone by now? It seems so, because since they have been producing agricultural tyres in Otrokovice’s new plant where some new machines have been installed, price and quality go together again, hence Werner Flebbe’s (55) managers in Hanover feel to be able to cope with the world-wide competition. However, Otrokovice is just a production site from where the agricultural tyre section can order, but it is an important one. Today, Continental certainly is the group’s first choice, offering the widest assortment and being distributed most efficiently. But already, the Barum brand, with its impressive variety, is being called a “volume brand”, and incidentally, in the radial tractor tyres segment, including the 75 series, it bears a remarkable resemblance to the Continental Contact. While Conti tyres are being sold throughout the whole trade, it was Flebbe’s idea to distribute Barum tyres in Germany only through some core dealers. Six big dealers (Wennekamp, Vergölst, Ihle/Günzburg, Schwarz, Semex and Brock/Weilerswist) have been given the exclusive right to promote Barum tyres, which means that they can sell to both trade and consumer. However, Hanover went a step further: The Uniroyal brand, which could have been placed very easily on the German market, has been offered exclusively. In an interview Thorsten Bublitz, responsible for marketing and sales of Conti’s agricultural tyres, assured, that by now Meyer Lissendorf has nearly all important sizes available, and it is planned to offer the complete range, with 68 sizes altogether, in September.
In a difficult environment Bridgestone/Firestone was able to sell in the first half of 2001 more units than in the first half of the year 2000. Managing Director Günter Unterhauser confirmed that, in the first half of this year, his company sold 4 per cent more passenger car tyres and 6 per cent more truck tyres while the market in general fell by 2 per cent and 4 per cent respectively. The increases in motor cycle tyres (plus 29 per cent) and agricultural tyres (plus 29 per cent) were significantly higher. In the EM-Segment Bridgestone sold as many tyres as in the first half of 2000 while the market shrank by 10 per cent. Due to several good test results the management is very confident for the winter season and is convinced that turnover for the year as a whole will be at least 10 per cent higher than the previous year. Operating results are in line with expectations and the management said that it is quite satisfied.
Only a few weeks before the start of the Agritechnica fair, Goodyear presents its brand new “Optitrac DT818” and “Optitrac DT824” tyres – the latest additions to the Optitrac family of agricultural tyres, to which the super volume tyre DT830, introduced at the end of last year, also belongs. The DT818 is the family’s super-wide tyre, created primarily for use on today’s higher horsepower tractors with large implements. According to the tyre manufacturer, the DT824 is the perfect choice for very heavy machinery including harvesters and combines. Both tyres hold a much greater volume of air than standard-width tyres, and, because they are wider, have a much larger “footprint”. The weight is distributed over a greater surface area, reducing the pressure at any single point and minimising soil compaction which has negative effects on the plants‘ development. The DT818 and DT824 have also been designed for optimal traction in all types of weather. They feature deeper, more powerful curved lugs for greater draw-bar pull and broad square shoulders provide extra grip. The tread area between the lugs has been specially shaped for better self-cleaning of the tyres. During the presentation of the new tyres Serge Daleiden, responsible for the farm tyre division in Europe at Goodyear, mentioned that future developments in the farm tyre sector could possibly also include the company’s BioTred technology. “This is not a promise, just an idea”, said Daleiden.
The worldwide market for tractors has seen many mergers over recent years but, with four big groups, this now seems to be coming to an end. Consolidation among tractor producers was regarded by their suppliers as a negative move, because the tyre manufacturers knew very well that the pressure on oe prices would intensify. In the European original equipment market for tractors, the three market leaders Michelin (including Kléber), Pirelli and Goodyear have a combined market share of 85 percent. This dominance was threatened in 1994, because the big tyre companies all trusted the (completely wrong)forecasts of their oe customers. Instead of the market contracting, the tractor producers found they could increase their sales. This was the hour of smaller tyre market competitors in the field, such as Continental or Firestone, “oe exotics” like Taurus or Galaxy – and even the hour of some specialist wholesalers: when before had vehicle producers been forced to go to dealers asking for tyres? However, the attack of the smaller tyre competitors was stopped, as the better service of the larger companies asserted itself, and the customer also helped things to return to the status quo. Unlike with car tyres, many buyers order their new tractor fitted with a certain brand of tyre. Because few farmers ask for Titan, Vredestein or Stomil, Pirelli, Goodyear and Michelin/Kléber regained their shares and the market returned to normal, once they had built up enough capacity to satisfy the oe business. Within recent years, market settlement also occurred because the number of independent tyre producers (but not the brands) has dwindled. Specialist producer Taurus (Hungary) and Stomil (Poland) became part of the Michelin group; Barum is a Continental brand. Others were looking for alliances and so the Romanian brand Danubiana (Tofan Grup) was on the wish list of Goodyear, because the US tyre concern found out that it lacked a brand at the economy level. (Later Goodyear managers considered Sava could fit the bill.) The US brand Titan has had a lot of problems in its North American home market and had to sell some niche segments. Israel’s Alliance closed one of two factories, Vredestein suffers under the high prices for raw-materials, Finland’s Nokian even gave the order to Michelin’s Poland plant (Stomil) to produce agricultural tyres because it did not seem sensible to produce this kind of tyre in the Finnish factory. Consolidation in the segment of agricultural tyres has not yet come to an end.
Agritechnica is the largest agricultural exhibition in Europe and the 2001 event was held in Hanover from 13th to 17th November. This year’s show area has increased by 4% to a total of 196,000 square metres and more than 1,300 exhibitors from 30 countries showed their goods and services. The exhibition showcases the latest advances in technology for modern agriculture, including tractors, other agricultural machinery, accessories and spare parts. Included in these are tyre manufacturers who offer agricultural tyres, with such famous names as Continental, Goodyear, Michelin, TWS and Vredestein, among others. Agritechnica usually proves a great draw for those involved in agriculture; this year with 247,000 visitors 9.5% more came through the doors than two years ago, 34,000 of these coming from 100 countries outside Germany, and similar levels were expected this time around. The November date for the show is well-timed, as this is the time of year when many farmers are planning their investments for the coming season.
Michelin subsiduary Stomil-Olsztyn has announced that it will be reducing ist workforce by 120 people during this year. At the same time, a further 70 full time employees have reverted to part-time. Stomil-Olsztyn are located in the regions of Warmia and Mazury in northern Poland and employ around 4.000 workers who produce passenger, truck, light truck and agricultural tyres as well as tyre fabrics and curing moulds.
The German newspaper Süddeutsche Zeitung has announced that Michelin intends to shed 1,800 jobs out of a total of 28,700 at its four plants in France according to the company’s restructuring plan. Most of them will be achieved by early retirements but approximately 100 employees will have to leave the company involuntarily.
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