Gary Nash
President
Yokohama Tyre Mexico
José García
José García
National OTR Sales Manager Exports
Yokohama Tyre Mexico
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View from the Top

Innovation Driving Radial Tire Technology

Wed, 10/19/2016 - 12:13

Q: Given how Mexico is one of the fastest growing mining industries, what role does the country hold within Yokohama’s global market share?

JG: Yokohama’s parent company, The Yokohama Rubber Co., is headquartered in Tokyo, Japan, and has been a global manufacturing and sales company of premium tires since 1917. Globally, the US holds the top position in terms of market size and opportunities followed closely by Canada. Mexico is not far behind, and it is now becoming one of Japan’s top five countries in terms of importance. When it comes to mining, Mexico was included in the business vision for its market potential. We have a strong presence in the US. and Canada and we look forward to adding Mexico to that list. It is a priority for Yokohama to explore new markets and customer bases, and we wish to expand our product availability.

GN: It is important that companies have the ability to expand globally and operate successfully in multiple locations. In a sense, Mexico was the missing piece of the puzzle to our North America Mining division. Today’s mining industry operates on a global scale, and contracts are won in the same manner. With almost 100 years of experience, Yokohama is building an image of the product that is a reflection of the positive aspects of Japanese technology, and we have chosen Queretaro as the place to develop our market position.

Q: The OTR market fluctuates regarding supply issues on a global scale, so in your eyes, what are the major causes of this change, and what did Yokohama do to adapt to these fluctuations?

GN: The root of this fluctuation can be traced to the drop in oil prices since it has a significant impact on the tire business. If oil prices are stable then the manufacturing and commercialization of tires is easier and the profit margin can increase. When oil prices dropped, it drove down tire prices, and the devaluation of the peso also contributed to currency fluctuations. We offer the mining industry flexibility, ensuring protection regardless of price fluctuation. The tires are produced in Japan and sold to the US and Mexico in dollars.

JG: There is a lot more fluctuation in our other commercial and consumer segments due to the involvement of pesos in payment but our OTR transactions are all in dollars. The mining industry is not performing poorly in Mexico because expenses are all in pesos and they sell their products in dollars.

Q: What steps does Yokohama take to create innovative technologies, and how has it helped your clients reach desired levels of efficiency?

JG: In the LTR industry, we have proven that our niche market is in underground mine tires and port tires. Our focus has moved towards radial while maintaining our leadership in bias, and we specialize in scenarios where a bias can outrun a radial tire. The Y69U tire works perfectly for underground mining as it features the industry’s first non-ferrous sidewall reinforcement, which protects it from chipping and cutting without extra risk of sparking. All mining operations are based on cost per hour so naturally all of our tires are based on cost per hour. Traditionally a tire can last 1,000-2,000 hours but the tire we offer has a unique protection that was designed specifically for the mining industry. Our products are proven to save money and give a better cost per mile.

GN: Our clients detail the challenges and circumstances of their operations, and based on that we tailor our products. For the Y69U we use a Zeon Super Composite (ZSC) that creates a wavy side profile on the sidewall, protecting the tire from chipping. Innovation is an important driver and our products are game changers in the industry. When doing business in Mexico this alone is not enough, and many of our clients seek integrity in doing business and product offering.

Q: What are the root causes of the mistrust of mining players in acquiring products like tires, and how has Yokohama helped erase these misconceptions?

JG: Mexico was for many years a dumping ground for tires and the mining industry suffered since the tires that were used were not well-suited. This experience has left a bad taste in the mouths of mining players. Our strength is that we always look to adapt to the customer and on the field we give them the authority to make decisions. We have gathered the trust of clients due to the integrity under which we operate and our stellar reputation.

GN: When carrying out tests on site the recommendations we give are based on ton miles per hour (TMPH). A tire can have a 480TMPH and another around 600TMPH, and this is a measurement that allows the company to understand the endurance limits of the products. Yokohama also creates special order compounds so the products we provide companies are tailored to suit their needs.

Q: What are the key priorities in your agenda in order to become the leader in radial tires for Mexico, and what new technologies do you wish to deploy in the market?

JG: Many mines are downsizing because of a lack of availability of large tires. There has been a lack of competition in the development of these products, creating a shortage. Other companies downsized to reduce costs since smaller equipment creates fewer expenses. Here in Mexico, companies are running the equipment for much longer but generally the market has remained stable. Companies are standardizing equipment across multiple operations since it facilitates technology transfer and lowers costs.

GN: We plan to introduce five new radial tires per year. If evidence emerges demontrating that bias tires are performing better than the new radials we will adjust our strategy to the indications. These indicators will depend on the companies with which we are working and their global demand. The US market demand is a determinant factor in the global market for large-sized tires. I see Yokohama’s entry into Mexico as bringing an experienced, professional player into the mining industry, offering technical support and the expertise needed to make decisions. We hope to provide education to mine managers so they can make strategic decisions.