Titan Increasing Activities in Canada, Mexico
Upon announcing Titan International’s first quarter 2010 results, company chairman and CEO Maurice M. Taylor Jr. spoke on the company’s direction during the year. “Titan plans to open a facility in Fort MacMurray, Alberta, Canada, by the end of third quarter this year to service our new mining customers, and we plan on embarking on a joint venture in Mexico this year for the distribution of all Titan products,” he stated.
“Titan is also developing new wheel and tyre combinations for large farming applications,” reported Taylor. “In 2009, Titan’s engineers worked directly with farmers, developing new tyres and wheels and will be testing these new 800R46 tyre and wheel combinations on large row crop and four-wheel drive tractors. These assemblies will give the farmer lower soil compaction and greater fuel efficiency. We will also be releasing new special grain cart tyres and wheels that will not only carry greater loads with less soil compaction, but also less rolling resistance. We are doing the same for combines.”
In terms of the company’s OTR business, Taylor commented that “the future looks bright in mining, both underground and above ground. Titan’s giant second generation 007 MFT tire is performing above expectations. The temperature under load of these giant tires has been 40 degrees lower than our first generation giant tire. This tire has the best traction of any giant tire in the market today.” New products for this sector have been introduced and the range will continue to be added to during the course of 2010, as Taylor elaborated: “We know our competitors are working on improving their tyres also, so we will continue to be innovative. Titan has expanded our product range of mining tyres to include 51- and 49-inch size ranges for haul trucks, and will release our first large radial loader tyres by September.
“It is the mining tire business that will determine whether Titan has a good year or a great one,” Taylor added. “The reason I say that is because by the end of the second quarter we will have results in from various mines on a whole range of performance data, and if we are as successful as we expect, then things will get better in the segment as each quarter rolls around.”
During the first quarter of 2010 a net income of US$2.1 million was recorded, compared with $7.0 million a year earlier. Sales reached $196.4 million, down from $232.6 million in the first quarter of 2009. “The first quarter started slow, but has improved each month,” Taylor stated. “Leading the way has been the big farm segment, which should continue to be strong through the second quarter, slowing down as normal in the third quarter and picking up in the fourth quarter. Mid and small farm product demand is still slow, and we do not see any growth in that segment until 2012. Our construction business is up slightly, because it had nowhere to go but up, though it is still off nearly 50 per cent from 2007 highs.”
Noting one difficulty the whole industry is currently facing, Taylor said: “Material costs are moving up very fast and Titan is increasing its prices to pass these costs along. There is generally a 60- to 90-day notice between getting our notice of increases and notifying our customers.”