AKRON—Greatoo Inc. greatly increased its U.S. business when it acquired a majority stake in an Akron-based tire mold maker earlier this year, and now it is planning an expansion along with its new partner.
Guangdon, China-based Greatoo bought a 75-percent share of Northeast Tire Mold Inc. for an undisclosed amount in a deal that closed in April, said Roy Hood, who serves as director/sales manager for both Greatoo and Northeast Tire Mold. He spoke about the deal and future plans during the International Tire Exhibition & Conference, held Sept. 9-11 in Akron.
Greatoo was formed in 1992 and besides making tire molds it produces and markets curing presses, CNC machines and automation equipment, Hood said. It went public in 2004 on the Shenzhen Stock Exchange and employs more than 2,600.
He said Greatoo traditionally has been strong in China and other parts of Asia, and sold through exports to several countries in Europe and some areas in the Americas. The Chinese firm is strong in direct engraved molds and also utilizes casting and EDM technology.
By buying into Northeast, Greatoo not only gains greater access to the U.S. market, but it also joins up with a mold maker that focuses on the high-end of the tire market, he said.
“In the past, Greatoo sold some molds over here, but customers were saying it was better to have someone over here to help with repair and service,” said Hood, now based in Akron. “That is why we came together.”
Hood said the two mold makers approached each other and share the same business philosophies. “That is why we came together so quickly,” he said. “We want to be the No. 1 tire mold maker in the world.”
And as it chases that goal, it has expansion plans ready to go at home, along with a new facility for Northeast.
Hood said Greatoo has capacity to make 10,000 molds a year at its two plants in China. Its factory in India currently can make 1,000 molds a year, but an expansion there will double capacity to 2,000 molds a year.
For Northeast, the plan is to invest $20 million to relocate the facility to a new building, either in Akron or the surrounding region. While no site has been selected yet, plans call for construction to begin next year and the new factory is expected to open in early 2016.
The forecast is for Northeast to produce sales of about $10 million in 2015—representing about 700 tire molds—and for sales of 1,500 molds in 2016, Hood said.
The management team at Northeast largely stayed intact, including President Christopher Sipe and Vice President Michael Christie. Hood said some senior staff did choose to retire.
Northeast has been strong in the states and in the future will look to export molds to South America from the Akron facility, he said. “They were limited by capacity in the past,” he said. “Sometimes when a customer wanted a mold, they couldn't deliver because of its size. Now they have the financial backing from us. We want to triple their capacity and even more. That will allow them to provide better service to the customers.”
There also will be opportunities to work together. Greatoo is building a high-tech mold shop at its facilities in China that will use the same programming, machinery and tooling package that Northeast will use, Hood said.