Alliance Tire expanding reach in North America

ERJ staff report (TB)

Denville New Jersey -- It's hard to find any good news lately, but 2009 is working out to be Alliance Tire Co. USA Ltd.'s best year yet, according to President Manny Cicero.

The Denville-based subsidiary of Israeli tyre maker Alliance Tire Co. (1992) Ltd. has been on a mission for the last two years to increase its visibility in the North American market. With a larger team of salespeople, a recently opened warehouse in Portland, Tennessee., and a new plant in India scheduled to go on line soon, the company is in the middle of a massive growth spurt, Cicero told ERJ.

“Right now we're already ahead of where we finished in 2007,” Mr. Cicero said. “Last year we were at $25 million in total in North America…. Our goal was to increase that by more than 30 percent (this year), and we're already ahead of that.”

In 2008, the North American market accounted for about 10 percent of Alliance Tire's global sales, but with recent economic slowdowns in other parts of the world, that number has increased to 12-15 percent. Mr. Cicero estimated about a quarter to a third of the world's agricultural production takes place in North America, and the company would like its percentage of sales to line up with that eventually.

A combination of factors has helped Alliance Tire grow this year. In March, the company opened the warehouse in Portland, giving it the ability to keep an inventory in the US while making purchasing tyres a faster, more convenient process for North American dealers.

Mr. Cicero said the warehouse, which is stocked with several million dollars worth of inventory, is especially beneficial for small dealers who don't need large shipments. It also helps with OE sales as well, because “it's hard to have an OE presence without the domestic inventory to back up your needs.”

A couple of years ago Alliance Tire tried to run a warehouse in the US, but it didn't work out because of “a lack of product and lack of coherent strategy,” Mr. Cicero said. Part of the problem was that the US unit was being operated from Israel “and nobody was here,” he added.

Alliance Tire recently augmented its team with four regional sales managers as part of its commitment to increase its presence in North America. Those new managers are:

• Pat Gaston of Omaha, Nebraska, to oversee the Midwest/Great Plains;
• Blaine Cox of Kimberly, Alabama, responsible for the Southeast;
• Tom Hirsch of Great Neck, New York, to oversee the Northeast; and
• Andy McAllister of Waycross, Georgia, named forestry tyre sales manager.

Mr. Cicero cited aggressive product growth as another strategy in boosting brand recognition, and the company's goal is to launch about 100 tyres and sizes each year.

“So far we've launched 37 new products, so we're a little bit behind,” he said. “…(B)ut two years ago we did 30 for the whole year.”

Part of the growth also can be attributed to advertising and brand-building strategies Alliance Tire has implemented. In addition to product introductions and adding distribution channels, the company has boosted its sales force, increased advertising in farm trade journals and is attending regional and national trade shows in which it traditionally has never participated.

“We don't want to lump ourselves in with the image of an import tyre brand,” Mr. Cicero said. “We've got very sophisticated products, and we're trying to build a brand image around those products.”

Finally, Alliance Tire is putting the finishing touches on its plant in southeast India, which will be ready to produce its first tyre by late June or mid-July, Cicero said.

Expected annual capacity at the $100 million plant will be 50,000 metric tons, which will double the company's total capacity. The facility, which sits on 115 acres, is 1 million square feet and will employ 1,000.

In the first phase of the project, Alliance Tire will shift its cross-ply rear- and front-tractor tyre and implement-tyre production to the India facility from its plant in Hadera, Israel. By year-end, the company also will begin shifting some popular radial rear tractor sizes to the new plant.

“We've taken quite a lot of investment on our shoulders in order to become a more predominant player in this North American market,” Mr. Cicero said. He added that capital backing from the company's owners, Yogesh Manansaria and his father A.K. Mahansaria, has helped to make those investments possible.

From Tire Business (A Crain publication)