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February 21, 2007 01:00 AM

Marangoni starts $20 million project

Kathy McCarron
Vera Linsalata
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    MADISON, Tenn. — Marangoni Tread North America Inc. has begun a $20 million, three-year expansion at its Madison tread rubber factory that will double capacity and provide more space for its headquarters and warehousing.

    The Alpha-Ring plant, which makes Marangoni´s Ringtread precure tread rubber, occupies about a third of a 150,000-sq.-ft. building Marangoni previously had been leasing.

    Marangoni purchased the building and about 13 acres of adjacent undeveloped land for approximately $4.5 million last August, according to President and CEO Bill Sweatman.

    The company expects to double its production capacity within 18 months from its annual output of 10 million pounds of tread rubber, Sweatman said. It plans to build additional facilities for retread production and warehousing either in 2008 or 2009.

    "We haven´t made the final determination on the timetable, but it might be that we start construction this year and add capacity in the first quarter of next year," Sweatman said. "But for us to hit that target, we´re going to have to start construction about mid-year."

    The company doubled capacity when it expanded and upgraded the facility in August 2005. The plant produces Ring-tread, a contoured ring of precure tread used for commercial tire retreading.

    Sweatman said Marangoni produces 75 percent of everything it sells in North America because of those capacity increases.

    Marangoni has 19 licensed dealerships that use Ringtread in 23 retreading plants in North America.

    Although the company didn´t increase its overall number of licensed dealers last year, its sales grew thanks to dealers who opened retread plants and commercial tire stores in additional markets, according to Sweatman said.

    He declined to disclose sales figures.

    "We were up about 25 percent last year (in sales), so we think we gained at least another half a percent of market share, if not more," the executive said.

    This year a "number of dealers" are looking to convert to Marangoni´s Ringtread system, he said. Marangoni has no target goal of licensed dealers it wants to sign, but Sweatman said 10-percent market share is an achievable goal.

    The company is hoping its licensed plants will convert to its new RT3000 dual headed extruder, which the firm said reduces time and labor.

    One machine is already in service at Systeme de Rechapage RTS Inc. in Montreal, and another is scheduled for implementation in March at Bergey´s Tire Service´s facility, located in Perk-asie, Pa.

    Amid its expansion plans, Maran-goni has introduced its RZYHM and RDYHM Ringtread designs to complement existing lines.

    More design sizes and applications will be unveiled in the second half of 2007. "2006 was a great year for us. We want to build on that momentum," Sweatman said.

    The company also is launching a multiyear marketing campaign.

    "We´ve had such success since introducing the Ringtread, we want to take our story to the end-user," the executive said.

    Advertisements promoting the benefits and features of Ringtread will run in trade publications.

    With the retreading landscape set to change this year when Bridgestone Americas Holding Inc. acquires Bandag Inc., Sweatman said he isn´t troubled that another tire manufacturer will gain retreading market share in North America.

    "We´ve got a superior product," he said.

    "It´s unique in the way it´s manufactured. We don´t see any difference in the ownership of Bandag as impacting our business in that regard."

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