Titan business buoyed by strong ag demand

CHICAGO—Titan International Inc. Chairman Morry Taylor has reported that order books at the group's TWI business "are full through 2022, and 2023 could be even better," as business is buoyed by strong demand for agricultural machinery.

Commenting that he had "never seen a market like this," Taylor linked the positive scenario to prices for corn, soybeans, wheat and cotton all being near historic highs.

"There is no surplus out there, which should lead to farmers spending on equipment for quite a while," the tires and wheels manufacturer said in a May 25 news release.

Business, he said, should "run hot for a while as there is no significant equipment inventory on dealer lots, and any change to the situation appears to be a long way off."

TWI has forecast earnings (adjusted EBITDA) of over $200 million for full-year 2022, an estimate Taylor expects to remain robust amid supply-chain issues in the market.

Prices for steel, the most critical raw material for Titan's wheel business, have more than doubled in the past 18 months. Here, Taylor said, Titan had maintained supply and managed increased costs with pricing.

Tires are different, however, her said, "because they also contain carbon black, natural rubber, and synthetic rubber and other raw materials. Titan has more options, including substitutes in a pinch, if needed."

TWI is "sitting solid and is managing well in this volatile and tricky environment," concluded Taylor, noting that global concern over food supply will "keep farmers very busy."