Greenball transforms business
The American company Greenball Corp., based in Anaheim, California, and offering tires under its private brands Centennial, GBC, Greenball, and Kanati, is undergoing a business transformation, according to Randy Tsai, the company's senior vice president, in an interview with Modern Tire Dealer.
Can you tell us about Greenball's current development and what changes have taken place over the past couple of years?
We've made some adjustments to our business model. 10-15 years ago, we tried to become a one-stop shop for all types of specialty tires - from golf cart and lawn and garden tires to agricultural and industrial tires. Unfortunately, it became much more challenging to implement this approach due to various tariffs and duties that affected the business model of many companies. Additionally, many competitors emerged in the market, and it became even more difficult to make a profit. In general, it's now tough to compete in multiple specialty tire segments.
Over the past decade, we've focused more on working in specific segments where we have advantages and better brand recognition, which ultimately ensures good profitability. Although we have tires for farmers and industrial equipment in our range, in the US, we no longer store them, and they are mainly available through direct container shipments.
Now we're concentrating on other market segments, such as supplying off-road tires for pickups, ATVs, and UTVs, as well as for trailers. Golf cart tires remain our core product, and we no longer offer as wide a range of lawn and garden tires as we used to, but we still offer them.
Greenball has made significant investments in developing its Kanati brand, under which off-road tires are released. What opportunities do you see in this market segment?
This is a huge market, as there is a very high demand for pickups and off-road vehicles. For this reason, many tires for these types of vehicles are presented on the market.
Each major manufacturer has all-terrain and mud-terrain tires, and we position Kanati tires as a niche product for this sector. Many of the tires available today are designed for the mass consumer market, but there is also a demand for tires that not only have an attractive modern design but also perform well off-road. That's exactly what Kanati tires are designed for, with improved off-road capabilities.
We've also been actively working in the market for special radial tires for trailers and UTVs. All UTV and ATV owners have trailers to transport them. And if there's a trailer, there's a pickup truck. These guys are real off-road enthusiasts who regularly go to the desert or the mountains, and they've been asking us when we'll start producing tires for pickups.
Where is Greenball's tire production located?
70% of our products are supplied from Indonesia, 20% from Thailand, and the rest from China.
What is the current situation with sales in the US?
During the COVID-19 pandemic, demand was skyrocketing, and we were selling everything we could deliver. It was challenging to meet all the market's needs, and delivery was also a separate issue. Then, in May 2022, everything changed abruptly. It was like someone turned off the water tap. When you need to plan a 90-120 day lead time, including production, shipping, etc., and demand suddenly drops, a large amount of "stuck" inventory is created. And this wasn't just the case for us, but for all other importers as well.
When the situation started to normalize after the pandemic, we had a lot of products at very high prices that we had to sell throughout the rest of 2022 and all of 2023. Unfortunately, this affected the operation of our production lines.
At the same time, when the flow of this product stopped, demand returned to normal, and soon we'll be increasing production capacity to 100% again. Just last month, one of our warehouses had 50 or 60 containers of goods [Greenball has two distribution centers located in Gardena, California, and Atlanta, Georgia].
Are investments being made in production capacity?
We always strive to be at the forefront of the industry and offer differentiated products. Often, this requires additional equipment or capacity at the factories that supply us with tires. We're constantly in the process of development.
Greenball has always been known for creating truly unique products, and we still receive orders from equipment manufacturers that require tires that are not available on the market. We're willing to work with them, and as a result of our developments, we're expanding the applications of our tires.
In other words, can Greenball produce tires with unique specifications if there's demand for them?
Yes, that's one of Greenball's advantages. We're a small company compared to many other tire brands, and we can implement projects that might not be large enough for other suppliers to take on.
What's the current situation in the American market?
2024 will be a unique year for the economy. Fortunately, the Fed hasn't raised interest rates recently, but who knows what will happen next? Will rates stay the same or decrease? Something new is reported every week.
Global events have also affected the situation. At the beginning of the year, there were shipping complications in the Red Sea. The cost of sea transportation increased. Fortunately, the situation has stabilized in many aspects.
I think the main question now is whether the economy has returned to normal. Judging by what our customers say, there's still no certainty about this. But is this a real downturn or a consequence of the pandemic?