Kargro Battles High Stocks and 50% Lower Retread Output

Built on the pragmatic assertion that “tyres don’t last forever; they get worn” the Kargro Group has quite literally made it their business to make good use of what others throw away. Like other similar operations Kargo collects both passenger car and commercial vehicle casings, inspects them and determines whether they are suitable for re-use, can be retreaded or are destined for the shredder. What’s different is the scale. Kargro Group stores an average of 120,000 casings ready for export to any of 40 countries at any given time.

However, when Tyres & Accessories visited the company’s Montfoort base earlier this summer, 40,000 casings were in inspection yard, with another 115,000 lined up in a further storage site nearby. According to company representatives, these above average casing stocks are a result of reduced haulage miles in the transportation business and therefore reduced usage. Rather than buy new stocks, some haulage companies are said to be idling vehicles and doing their own internal tyre replacements. 315/70 R22.5 size products are said to be moving particularly slowly. That said, at the last published count (in 2007), the company calculated that it traded 1 million tyres a year.

However, with current market conditions as they are, it is unlikely that the company traded so many in 2008 or will do in 2009. Instead successful navigation of the recession looks likely to come down to the company’s diversity. Kargro’s strength is in the varied, but inter-related nature of the group’s component parts. At the core of the business is the company’s casing collection and storage operation, which takes place on 75,000m2 of premises to VACO, Recytyre and ISO 9002 standards. A large proportion of the casings the company collects are stored on-site before being exported all round the world. Suitable passenger car casings are distributed through the company’s Lintire international trading subsidiary. In addition, Kargo International specialises in the sales of new and used truck wheels “in most common sizes.”

Those casings that aren’t exported or traded are either retreaded (by the company’s Banden Plan, Tyre Plan, Bandag and UBO retreading operations) or reprocessed by Kargro Group’s Rumal subsidiary. As far as production is concerned, retread output may have been down by as much as 50 per cent when T&A visited, but that is no different to the marked production cuts experienced across the board.

The fact is that the company’s Banden Plan (in Holland) and Tyre Plan (in Belgium) businesses are able to pre-cure or mould-cure retread customers’ own casings according to their wishes. Mould-cure retreads are branded with the UBO trademark, while pre-cure retreads are produced using the Bandag process. The company’s annual Bandag capacity equates to 60,000 units a year and the group has 21 mould-cure presses. Quality remains high on the company’s agenda, with the UBO factory one of the first in Europe to be ECE109R and ISO 9002 certified.

Tyres that are not traded, exported or retreaded end up at the Rumal division, which brought its 20 years of experience in tyre recycling into the Kargro Group in 1994. Rumal reprocesses 30,000 tonnes of tyres each year. Tyres with a maximum diameter of 1400 mm by 450 mm are fed directly the shredders and come out as rubber granulate and crumb. The company runs two production lines under cryogenic (below -45°C) and normal ambient temperature conditions. The resultant materials are used in products such as synthetic sport surfaces, carpet underlay, car mats, brake pads, cattle mats, solid wheels, rubberised asphalt and compound-extenders. So as the company says, whether they end up running as retreaded tyres or in carpet underlay, tyre Kargro collects still get to “run again.”