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Titan sets sights on growth in new year

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Maurice Taylor Jr., chairman and CEO of Titan.

QUINCY, Ill.—Titan International Inc. is looking to grow via acquisition and organically in the new year.

The tire manufacturer currently has as many as five plants on its radar screen, Chairman and CEO Maurice Taylor Jr. said during a recent conference call and later in an interview following the release of the company's management goals for 2014.

Titan currently is in serious negotiations with the five companies, he said, adding that Titan is performing due diligence on the facilities. "If we complete these acquisitions, the maximum additional revenue would be approximately $500 million," he said.

While Taylor did not specify the names of businesses that could be involved in the transactions, he did say that, excluding Titan's continuing interest in purchasing a French plant owned by Goodyear, the tire manufacturer has its sights on two plants in the European/Russian theater and two or three wheel facilities located elsewhere. None are based in North America, he said.

In terms of Goodyear's plant in Amiens, France, Taylor has had informal discussions with the country's industry minister in which he expressed an interest in buying the Amiens North factory.

But he said that can only happen after the union resolves its problems with Goodyear, the latest of which involves a class action complaint the union filed against the Akron-based tire maker.

The purchase in France depends on union and government officials in the country, Taylor said. "Goodyear got kicked and punched (by those same officials) trying to save jobs there … so it's up to the union and government to decide what they want to do."

Acquisition of more plants is just one of several Titan management goals for the coming year. Others include revenue growth to between $2.4 billion and $2.7 billion for the year and EBITDA growth to between $240 million and $270 million.

Both projected revenue and EBITDA figures "presume pricing and material costs remain flat in 2014," Taylor said.

The company has had sales of about $1.7 billion thus far in 2013. It recorded revenues of $1.8 billion in 2012.

Also high on its list is increased development of Titan's newest company, Titan Tire Reclamation Corp., a joint venture with Green Carbon L.L.C., and growth of Russian farm and industrial tire maker Voltyre-Prom, in which it recently purchased an estimated 35-percent interest.

Titan partnered with One Equity Partners and Russian Direct Investment Fund to make its purchase in Russia.

"There's a good possibility we can have double-digit growth with that company," Taylor said, but it may take some time to accomplish that goal.

Titan has moved from being a North American farm wheel and tire manufacturer to a global producer of products during the last few years, he said.

"We have also become a big player in the construction of mining wheels, tires and tracks," he said, adding he believes the next few years are going to be strong for the farm and construction industries.

"We are excited about new opportunities that lie ahead for Titan in 2014," Taylor said.

For instance, he said, Titan Tire Reclamation will use a licensed pyrolysis system to reduce rubber tire to oil, carbon black and steel, he said. The unit is a perfect fit for Titan Mining Services, the business under which it operates, he noted.

He believes the business can generate $250 million or more yearly in revenue from the sale of reclaimed carbon black, oil and steel.

Taylor said a single 63-inch tire will convert into more than 500 gallons of oil and generate carbon credits. The recovered oil, carbon black and steel can be turned into bio-diesel fuel, while the carbon black can be recycled into green rubber products. Steel from the tire can be turned into mining components such as bucket teeth, he said.

Titan expects that a number of mining companies and contractors in the Canadian Oil Sands will sign up with TTRC next year because of the importance of tire recycling. Taylor said he had just returned from the oil sands where it was -17°F "and the amount of business up there is truly amazing."

After the company has TTRC recycling units set up and running in Alberta and British Columbia, it plans to add operations in Wyoming and Nevada. Down the road, Titan will open locations in Chile and Australia, "where there are large amounts of used 63-inch tires to be recycled," according to Taylor.