September 25, 2018 << Back to Press Release
September 25, 2018
Alliance Tire Group (ATG) will focus on Middle East and other Asian countries, mainly India, because of the growing opportunities in the construction and infrastructure sectors. The company aims at creating distribution networks for its product offerings in these markets, Angelo Noronha, President, APAC and MEA, ATG, said. “We will bring more people on the ground to understand and service the market better. Obviously as per our stated philosophy, we would understand the market and provide application specific purpose-built products that deliver better value,” he said. With the growing infrastructure opportunities in the Middle East and other Asian countries, ATG sees good demand for the off-highway tyres in the coming years. “With the global trade intensifying, ports are increasing their efficiency. They are bringing more advanced machineries to meet the growing demand. The more the number of machines more is the demand for tyres from the OE and the aftermarket,” Noronha said. ATG has around 2000 dealers and distributors across 120 countries and is engaged in development, manufacturing and sales of agriculture, forestry, industrial and OTR tyres. Having three manufacturing facilities, two in India and one in Israel, it owns three popular brands, Alliance, Galaxy and Primex. ATG clocked a global turnover of over $575 million in 2017. In 2016 the Japanese tyre giant, Yokohama Rubber, acquired ATG for $1.18 billion to expand its commercial tyre offerings. The acquisition offered a wide range of mining and construction tyres and added agriculture and forestry tyres to Yokohama Rubber’s product line-up. Before the acquisition, Yokohama was not into manufacturing and selling of agriculture and forestry tyres. ATG now has the support of Yokohama’s strong global position, R&D, raw material supply and finance. For any acquisition, integration of cultures is an important task for both the parties. In the last two years, the integration process has been smooth and without much interference in ATG’s business. “Culture is all about seeing and respecting each other’s organisational fitment. We have been very fortunate to have Yokohama as the principal. Yokohama has been in the industry for over a century and has R&D, rubber technologies, compounding and raw material strength. Due to maturity and stability in Yokohama’s business, ATG can continue to work in its own fashion,” Noronha said. There have been no management changes in ATG after the acquisition. To have better understanding, Yokohama has deployed some senior executives at ATG’s Mumbai office. On the operation side, the acquisition also aimed to reduce overlap of businesses and non-synergistic benefits. Less than two percent business has been overlapped, claims Alliance Tire Narrows Focus To Asian Markets By Sharad Matade Angelo Noronha Dual Master Excavator Radial tyre AutoPartsAsia | SEPTEMBER 2018 | 67 Dahej, Gujarat Plant 1 Noronha. On field, both the companies have been clear to have businessdriven synergy. The acquisition of Alliance and Galaxy brands has established ATG in Europe and North America. Originated and founded in Israel in 1950, Alliance, acquired by the Mahansaria family in 2007, is a longestablished agricultural machinery tyre brand. The brand has a product line-up with more than 1,000 different products and sizes for tractors, sprayers and spreaders and a strong presence in the European market. Galaxy has been mainly catering to the construction vehicle segment since the last four decades with a strong presence in North America. ATG’s third brand, Primex , produces tyres for forestry and mining equipment and mainly targets the North American market. The US and Europe account for over 40 percent each of in ATG’s global revenues. Though OEs do have different approaches to the business for different regions, they are now looking at OTR tyres as a differentiator to sell their machines. “OEs from the US and Europe expect technology which can make a difference. They are looking for a differentiator in tyres which can help machines to perform better, which is seen and respected by the end-users,” Noronha said. ATG gets engaged with OEs from the conceptual stage of new machines to have a better understanding of its customers and provide them the right products. ATG has been credited with innovative breakthroughs in the OTR tyre segment. It owns high-speed flotation radial tyres, designed for high speed performance, which can achieve a speed of up to 100 kmph for agricultural trucks. The high-speed flotation tyres have twice the width and are inflated to half the pressure of conventional truck tyres which put less pressure on soil compaction. For heavy machines, the all steel radial construction of the Dual Master offers smooth running at higher speeds, better puncture protection, increased stability, higher load carrying capacities, better flotation characteristics, lower rolling resistance and better fuel economy. In addition to an expected tyre life of about 6,800 working hours and excellent retreadability, the features of this tyre add up to a superior overall performance with low total cost of ownership. For the replacement markets, ATG has a product library of 2800 to 3000 SKUs. The company brings out 250 to 300 SKUs every year. “First the distributors have to see merit in us. When they see this SKUs range, they know that we will keep their business viable. Secondly, we introduce 250 to 300 sizes every year which help distributors to offer new technology, sizes and design to the customers. Coupled with this, our people meet the distributors and farmers often,” he said. Though ATG has the advantage of low-cost manufacturing locations with support of technologies from the US and Israel, selling technology at the right cost is another major challenge. For this, ATG deploys large number of field engineers who help the company’s customers to understand the products and their operations. ATG has three manufacturing facilities, one in Hadera at Israel (ATI), and two in India (ATC) one in Tirunelveli, Tamil Nadu and another in Dahej, Gujarat, which is said to be one of the largest OTR tyre plants globally. Both the Indian plants are located near ports which help in the efficient and timely delivery of products worldwide. Majority production now takes place at the company’s Indian plants, while the Israel plant continues to make high performance tyres. The company’s R&D centres are in Israel, North America, and India. The strategic locations of these centres enable ATG to understand the unique needs of farmers, contractors and other end-users in each region. This has helped ATG’s brands in becoming the preferred OEM choice across the globe. ATG has plans to customise solutions for specific needs of India as the market is more competitive than and different from the developed markets for the OTR segment. “There is a huge difference between India and other markets. In the developed markets, large machines can achieve 80- 100 km/ hr speed, whereas in India machines’ speed is limited to 30 km/hr. In Europe tractors have 120 hp, whereas In India the tractors are of much less power. So, we need to offer application-based products,” he said. There have been reports that ATG intends to build another plant. Currently around 95 percent revenues of the company come from exports. The selection of manufacturing locations is completely determined on business economics. “We have to look how we can offer our products and services in more appropriate economic manners. OTR is a labor-intensive manufacturing business whereas in passenger tyres, more automation is involved. If we can satisfy the customers’ total economic needs then it does not matter where we are based,” Noronha said. The OTR tyre segment is also divided into three groups, the premium group in which companies like Michelin and Trelleborg serve the market and the economic OTR segment which is dominated by the Chinese tyre companies. ATG finds itself in the midsegment, known as a value segment. Appropriate quality at competitive price is what ATG wants to offer and development of technologies helps ATG to compete with economic OTR makers on cost and premium tyre companies on quality. Since green tyres are meant to have less impact on environment and better fuel efficiency, durability and safety, they have been on the radar of tyre companies in the wake of tightening regulations and overall trends in the automotive industry. ATG is taking every effort to make its tyres green. It is concentrating on better raw material purchase, mixing and ratios of raw materials. “When we design tyres, we aim at customised solutions which adds to design complexity and cost. So, we can offer many features with our products. And being an exportoriented company, we have to be ahead of others, sticking to stringent regulations,” Noronha said. .