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VOL. 122 | NO. 187 | Wednesday, October 3, 2007

China Manufacturers Alliance Sets Up in Memphis

By Eric Smith

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NEW USE: Monrovia, Calif.-based China Manufacturers Alliance LLC has bought the old ADVO Inc. manufacturing/processing facility at 4481 Distriplex Cove in South Memphis.
-- By Eric Smith

Memphis is often lauded for being a cultural and commercial crossroads.

It's a place where various forms of music - country, western, blues and gospel - converged in the 1950s to bring rock 'n' roll to the world.

And it's still the place where various forms of transportation - trucks, trains, planes and boats - converge to deliver myriad commodities throughout the world.

Indeed, Memphis continually validates its "America's Distribution Center" tag with each announcement of a national or global business moving part or all of its operation to the city because of the area's robust infrastructure.

That distinction has been bolstered once more with news that a California tire company with ties to the Far East will set up shop in the Mid-South.

China Manufacturers Alliance (CMA) LLC, whose headquarters is in Monrovia, Calif., has bought the former ADVO Inc. production facility near the airport in South Memphis for $4.1 million.

CMA "unites major tire manufacturers in China under a unique and powerful cooperative alliance," its Web site states. "This alliance forms a high-energy cooperative force in the American and European tire marketplaces."

Preparing to distribute

CMA bought the 169,272-square-foot manufacturing/processing facility at 4481 Distriplex Cove from Stephen C. Murphy, Thomas W. Holley and Joseph A. Kelley III, according to The Daily News Online, www.memphisdailynews.com.

Built in 1994, the facility sits on 10.4 acres north of East Shelby Drive, south of Arnold Road and west of Getwell Road. The Shelby County Assessor's 2007 appraisal was $4.7 million.

CMA plans to spend approximately $1 million in updates to the facility, said Larry Williams, the company's former CEO who now serves as senior adviser.

The bulk of the renovation will be focused on an upgraded sprinkler system. CMA is having installed an ESFR (Early Suppression Fast Response) system, which is common in warehouses and distribution centers.

Once that system is in place, the company will start shipping in tires from its alliance of Chinese manufacturers to distribute to points all over the United States and Europe, Williams said.

Along the supply chain

The estimated launch date for the Memphis facility is about 10 weeks away, although Williams said the volume of tires handled by the Memphis facility - the company's first full-fledged distribution center outside its Monrovia headquarters - is not yet known.

"Since this is a new venture for us," Williams said, "we have not established any sales figures or projections at this time."

Williams cited Memphis' central location and proximity to CMA's customer base as prime reasons for launching the facility, which will be managed by industry veteran Bob Humlicek.

Williams said the company's supply chain will be as follows: Ship tires in containers from China to Long Beach, Calif., via ocean freighter and send them cross-country to Memphis via rail.

"From Memphis, the shipments will go out in mostly truck load and some LTL (less-than truckload)," Williams said.

CMA is 17 years old, although this current incarnation of the company has been around about a decade, Williams said.

With annual sales of approximately $200 million, CMA is the wholly owned U.S. sales and marketing unit of Double Coin Holdings Ltd., a Shanghai, China-based company formerly known as Shanghai Tyre & Rubber Co. Ltd.

Products include bias, industrial, medium- and giant-radial and over-the-road - or OTR - tires. Its most popular product is the Double Coin tire, which was the namesake for the rebranding of CMA's parent company.

"We're trying to make our corporate name more synonymous with the tires that we're selling," Williams said.

At a crossroads

CMA's new Memphis home has been vacant since last year. The Distriplex property formerly housed a production facility for Connecticut-based direct-mail company ADVO Inc., which announced in April 2006 plans to close the Memphis plant as a cost-cutting measure.

ADVO was acquired by Valassis, a Michigan-based direct-mail company, in March.

The Distriplex facility has some office space that CMA could use later, but right now the focus is getting the warehouse/distribution operation up and running.

CMA's Memphis center, which will employ 15 to 20 people, will serve an integral role in the company's hopes of getting more tires to its customers more efficiently.

"This is a new step," Williams said, "an additional step in our growth that will be planned over the next several years."

And the crossroads that is Memphis should help CMA achieve its goal.

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