Len Lottridge, of Prema Canada, along with several partners are about to launch Green Arc Tires Manufacturing Inc., a passenger, SUV and LT tire heat cure retreading facility. The group is seeking interested businesses looking for retreaded passenger tires.
According to Lottridge, $37 million in funding has been secured and a 400,000 sq. ft. site has been chosen for the facility in St. Marys, Ontario. Lottridge noted that one requirement is yet to be met – non-binding expressions of interest from potential customers.
“A little over 25 years ago passenger tire remolding disappeared almost completely when the change over from bias to radial was complete,” explained Lottridge. “The equipment to remold radial passenger tires is completely different than that for bias passenger tires and considerably more expensive. Almost all passenger remolders exited the business.” (Green Arc refers to the retreading process as remolding.)
“Also, at that time, the cost difference between a new tire and a remolded tire was a lot less than today. The introduction of less expensive Asian and other off-shore new passenger tires made a remolded tire far less competitive. Today, domestic and off-shore pricing is significantly more expensive. Green Arc Tires will be exceedingly competitive. Since 70% – 80% of the value of a tire is in the casing, Green Arc is able to produce a remolded tire at a fraction of the material cost of a new tire.”
Equipment for the facility comes from Italy’s Marangoni, while the non-destruct tire test equipment will be sourced from Germany. Tread, sidewall and other rubbers will be supplied by AirBoss of Kitchener Installation. Testing and training for the first wave of equipment will take about two months.
Initially winter tires will be produced, Lottridge said. All-season tires will be produced as demand and production capability exists.??“While we expect to replace some new tire sales with Green Arc Tires, we fully expect that most sales will be to new customers who will now be able to afford a set of 4 winter passenger tires,” noted Lottridge.
Production rates for this first stage are projected to reach 1.2 million units by the end of year. The ultimate goal, per Lottridge, is three million units per year.
Lottridge has also determined that pricing for the tires will be per rim size. Discounts from dealer to retailer will be up to 40%, and from retailer to wholesale will be up to 25%. These and further possible discounts will all be predicated on volumes.