RUBBER RISING

Colombia 2015 | INDUSTRY | B2B: TIRE COMPANIES

As part of the auto-parts sector, tire manufacturers in Colombia are part of one of the most globalized and trade reliant sectors in the country.

Sergio Prada
SERGIO PRADA
General Manager
Bridgestone
John Luis Torres Tovar
JOHN LUIS TORRES TOVAR
General Manager
Goodyear

Can you talk about Colombia's role in the regional market and how they intersect?

SERGIO PRADA When we separated from the Venezuelan market, we gained a degree of independence, but being a Colombian commercial operation meant that we needed to be supported by a mother plant, and to improve our supply logistics for our clients. To this end, in January 2013, we made the decision to join the Costa Rica operation. This means that we have a plant only five days away by ship that supplies us with products at a rapid pace, which was something we used to lack. We were bringing products from Japan, US, or Brazil, which took between two and six months to arrive. Now 60% of the products we sell come from Costa Rica. Ecuador was a complicated market for us in 2013 due to regulatory change at the time. We sought alternatives to complying with these regulations, and now we are growing by 37% more than in that year.

JOHN LUIS TORRES TOVAR We are investing in new technologies for the new generation of MRT, or radio tires. We are still in the process of that investment so I can't give you the exact numbers. The focus is to increase our capability to produce the new generation of truck tires. We're introducing new tires for trucks to increase their speed at a cost per kilometer rate. The market is changing notably. Every year we have find new opportunities in the market and also introduce custom packet products. This is especially because our Asian competitor's tires have very competitive costs. Also, we're more flexible in terms of capitalizing on opportunities as we produce our tires locally. But that is no sufficient, and we have to provide other added-value services like delivering support across the country for more of the truck fleets. Fleets in Colombia are in the process of professionalizing and owners today are more demanding. In the past, the business goal was simply to sell tires, now we have to provide a service; we have to follow every tire on every truck. We have to take care of every single tire. We advise truck owners on how to reduce their costs per kilometer. We work with 70 dealers nationwide to support fleets with good service, providing the tires, caring for them and also support re-treading. The latter is a key part of our business as it reduces cost per kilometer.

Which are the sectors to which you distribute more products and which have more potential for growth?

SP Our products are oriented to the transport sector, which play a important role in the development of the economy of Colombia. This was even more so the case when once we signed the Free Trade Agreement (FTA) with the US, while three FTAs are about to be signed with Costa Rica, Japan, and South Korea, which are already being discussed in the chamber. We are highly involved in the oil and transport sectors at a national level, in projects such as the “Transmilenio," and with different transport companies in multiple cities. Beyond that, we are also aligning with these sectors and encouraging rethreading, we own our Bandag brand, which is a rethread trademark. We are heavily involved in the national development, working closely with Andi on a post-consumer collection program for used tires and their disposal.

How have the country's efforts to integrate its markets affected your business?

JT In the past we had to manufacture tires in each country and for that reason we established around 10 factories in Latin America. In recent years, as Colombia has established free trade agreements with different countries, we combine our local production here in our factory where we focus on commercial tires and OTR tires with several other imported tires, such as small car tires, SUVs and light truck tires. Our factory is focused on MRT. MRT is high technology for truck tires. We are very focused on planning for this side of the business. We are now open exporters for the Andean region and also Brazil and Central America.