Mid-year Report: New Triangle CEO says OTR, TBR demand high

In an exclusive interview with Campbell Metcalfe—his first since being named CEO of Triangle Tire USA Inc.—Metcalfe told Tire Business that the tire maker is focusing heavily on servicing the needs of the OTR and TBR markets, which continue to grow.

Logistics challenges remain plentiful, he said, and the company still hopes to revive plans to build two tire plants in North Carolina—originally announced nearly four years ago—in the future.

How would you describe business thus far in 2021?

Our business in the OTR and ST (specialty trailer) tire segments has been strong, only hampered by global logistics constraints.

Triangle is the fourth largest OTR tire producer worldwide with a substantial number of fitments with heavy equipment manufacturers. For instance, Triangle is a top three global supplier to Caterpillar. Our OE presence and product quality are giving our dealers confidence to aggressively promote Triangle OTR radial and bias tires to their customers.

ST tire sales have been strong industrywide with more people seeking outdoor activities. Triangle has placed an emphasis on ST tire development for decades, and our plants are working overtime to keep up with demand.

As with our OTR tires, our dealers are bullish on Triangle ST tires due to the product quality; no dealer wants a call from a customer who was headed to his favorite bass lake but is stuck on the side of the road with a damaged trailer tire.

Concerning the TBR market, the first half of the year started slower than expected; however, business did pick up toward the end of the first quarter. The second quarter was only hampered by supply constraints. As the supply increases, we anticipate a growth year in the TBR sector.

We anticipate the TBR market to be robust throughout the rest of 2021 and into 2022. As the economy continues to grow throughout this period, demand for transportation services will expand.

There are, however, headwinds—recovering from the COVID-related plant closures and the continuing logistics challenges being faced in getting product distributed have caused shortages of TBR products. The demand is strong, but the shortage of product will quite possibly "mask" the true potential for growth.

Triangle sells very few passenger and light truck tires in the U.S. due to high import tariffs and duties.

What is the one thing you would like your customers to know about how your company has tackled the challenges brought on by the pandemic?

Like all Chinese manufacturers, Triangle was hit hard at the beginning of the virus outbreak. We were closed for three weeks for the New Year and two more weeks to implement safety protocols.

After the shutdown period, Triangle—after taking proper safety precautions—began ramping up production again. By March 2020, our four plants were operating at near-full capacity and began operating at full capacity later that spring.

Taking early aggressive safety protocols in our plants enabled Triangle to return to full production much sooner than many of our competitors.

Do you expect any supply difficulties in the second half of the year? If so, what sector is most in short supply? When do you expect the situation to ease?

We anticipate the global logistics breakdown to gradually improve through the rest of this year but will continue to constrain supply as the U.S. economy roars back to life and demand is strong.

We anticipate OTR tire demand to continue to be very robust, especially if an infrastructure bill is passed by Congress.

We also anticipate growth in the TBR market for the rest of 2021 going into 2022.

Product shortages exasperated by the COVID-19 pandemic and the onslaught of the global logistics breakdown have created some chaos in the potential growth of the TBR market; however, demand is there that will easily drive a growth market for TBR products if the industry is able to deliver.

What are some of the pleasant surprises you are seeing in the industry?

The strength of the ST radial market has been a continued pleasant surprise as well as the steady demand in OTR tires.

It was almost four years ago when Triangle Tire disclosed plans for two plants to be built near Rocky Mount, N.C. What is the status of this project?

The project continues to be "stalled" for a number of reasons, but we are still optimistic it can be resumed in the future.

Do you expect any major investments in the next six months or year in any of your global facilities, in either personnel, distribution facilities or capacity expansions?

Triangle continues to look at global investments to enhance its competitiveness.

Having all plants currently in one country (China) has proven to be a disadvantage. We fully expect to invest in global manufacturing once the pandemic eases and global travel becomes the norm.

In the U.S., Triangle Tire intends to expand the number of domestic warehouses to have products closer to our customers when they are needed.

How will the recent Commerce Department ruling on antidumping duties on passenger and light truck tires made in Thailand, South Korea, Taiwan and Vietnam affect the company?

As noted, Triangle sells very few passenger and light truck tires in the U.S. due to high import tariffs and duties. Therefore, the CV duties on these targeted southeastern Asian countries will have little impact on Triangle's consumer tire business in the U.S.

They will result in higher prices for consumers though, which is usually the case with duties and tariffs.

What kind of trends are you seeing in the market? How is your company reacting to them?

The trend to more outdoor recreation for Americans has increased the demand for ST radial tires. Triangle has greatly increased production capacities of both Triangle and Diamondback brands to meet the increased demand.

Triangle recently rolled out a radial OTR tire for rigid dump trucks. Is that a potential area of growth?

We anticipate continued strong demand for OTR tires with residential and commercial construction going strong and an infrastructure package in the works. Global logistics bottlenecks, however, will continue to present challenges for all tire manufacturers.

Do you expect to roll out any additional products in 2021? What will they be and what sector will they serve?

New for 2021 is the TB576 high speed mobile crane tire. An innovative new design not only improves upon our previous offerings by ensuring a smoother ride and facilitating more even tread wear, it also is available in a 525/80R25 (20.5R25), which fills a significant product gap for us.

This tire is just one of many new innovations and sizes

Triangle is working on. It is offered in several additional sizes and is ready for immediate shipment.

What has been the overriding factor in recent price increases?

We have been hit simultaneously with two events—rapidly increasing raw materials pricing and an unprecedented jump in ocean freight rates.

The combination of the two has caused a huge increase in the manufacture and shipment of tires. Hence the increases.

What keeps you up at night?

Thinking about the shoes that I have to fill (with the retirement of Manny Cicero) keeps me up at night, but I am excited about the opportunity and about Triangle's prospect for growth in the U.S. I believe we have a tremendous value proposition to offer to the market.