AKRON—The major trends driving business in the tire industry are all things that benefit tire machinery maker VMI Group, according to the firm's CEO.
Those factors include reshoring to bring tire production closer to the customer, the need to update technology at older tire factories and a push to use new materials that have a lesser impact on the environment.
"These three factors together are driving investment in new equipment," Harm Voortman, CEO of the Epe, Netherlands-based VMI Group, told Rubber News. "This is good for companies like VMI. Over the last decade we have been focusing on automation and creating higher levels of automation. That fits very well with what the market now demands."
The reshoring trend is one that goes against past practices, where companies would produce everything as far away as possible to keep costs low.
"Now you want to be close to your markets because of the transportation issues and the disturbances in the supply chain," he said in the interview at the recent International Tire Exhibition & Conference in Akron. "That means in the Western World you see a lot of investment going on. But in order to do that in a cost-efficient way, you have to go with a high level of automation."
Secondly, much of the installed tire manufacturing base in the Western region is behind in technology, meaning companies need a lot of personnel to run the production lines. That makes it tough to be cost-competitive with newer operations, Voortman said.
"The problem with personnel is that this is a real driver now for companies to invest, because it's very difficult to get motivated people. If you have people, after awhile they move on. Turnover is high, and (replacements) difficult to get. That means this drive for automation is enormous at this moment."