The new era of retreading: Quality, service and information

At present the Italian retreading market, following years of crisis, is experiencing a new birth. “From this and the coming years we expect that industry will recognise retreading in terms of its quality and its utility to the market,” comments Brenno Benaglia, vice-president of the Italian retreading association AIRP (Associazione Italiana Ricostruttori Pneumatici) and the European association Bipaver.

The Italian market’s loss of competitiveness dates back a number of years to when retreaded tyres had a reputation there as being bad products and market participants, dealers and fleet operators held strong prejudices regarding their reliability. Such opinions have only slowly abated through retreading sector investments in professionalism, product quality and in public awareness campaigns, Benaglia shares. Due to recent price increases, market margins now stand in line with costs.

“Should no unforeseen events occur, in 2012 we expect a slight increase in the cost of raw materials, and therefore prices will only slightly increase,” the AIRP vice-president continues. “Raw materials are traded on a global market and markets within this such as the USA are recovering and other markets, such as India or China, continue to further grow. And Europe will thus become increasingly marginalised, and it must pay accordingly.”

The start of this current year was not a successful one for Italian retreaders, in part due to the bad weather and in part due to strikes within the country. According to the AIRP it will therefore be difficult to further increase last year’s good sales figures. This start of year appraisal applies even if the second half of the year brings an improved business environment. ”Currently the Italian market – in addition to having low levels of freight haulage by truck – lives with the conflicting priorities of two fundamental developments,” Benaglia explains. “The first of this, which also affects the new tyre market and Italian business as a whole, is the country’s credit crunch. In Italy, where only a few large fleets exist, haulers and logistics firms are as a rule under-capitalised and face strong competition from haulers based in other countries. The second development is that many large companies and the building sector are very slowly recovering.”

In September 2001 an official end of life tyre recycling system was implemented. Although the collection of old tyres under the “Ecopneus” system has perhaps led to a short-term removal of retreadable casings for several niches from the system, the AIRP vice-president points out that in the long-term Ecopneus should also lead to a positive influence upon retreading and make it more competitive as the disposal levy is only placed upon the price of new tyres.

Meanwhile, the largest problem confronting the Italian retreading market is the shortage of retreadable casings. On the one hand only a small number of original equipment new tyres were sold in recent years, and on the other hand tyres in use are often driven down to their beading and thus no longer suitable for a second tyre life.

Benaglia expresses no doubt that the future of retreading lies in quality, specifically in the quality of products and also related services. The Italian retreading association has sought over a number of years to increase quality through promotional campaigns and special initiatives, including defining specific standards that the AIRP has adopted as minimum standards for the Italian retreading industry. This initiative is admittedly voluntary, however it has made an important contribution towards the creation of a product culture within the Italian tyre market and is also well suited for increasing the entire sector’s expectations in terms of quality. In accordance with the desire for greater market transparency, Benaglia also welcomes the inclusion of retreads in the tyre labeling requirements.

“In 2012/2013 we expect the number of retreaders to further decline. And although several companies have left the business, there is still an oversupply of unqualified retreaders in Italy. At the same time we predict that retreading will increase its market share in Italy due to an anti-cycling development following the crisis,” the AIRP vice-president continues. Changes to the retreading market’s structure are also being driven by the increasing presence of new tyre manufacturers within the sector. “We are pleased about this presence as they represent a qualified competition and it shows the new tyre manufacturers’ commitment to valuing the second casing life and saving raw materials.”

Retreading remains a business many gladly engage in out of a desire to save raw materials through the creation of a second tyre life. “I look with confidence towards the future: Following difficult years linked to the sector’s qualification and the closure of many operations, we are now ready to enter a new era. We want to place a high quality product alongside new tyres. Retreading will have a great future if it is not overburdened with too many compromises,” concludes Benaglia.