Retreading
The EU Appeals Court is set to rule on whether Michelin breached EU anti-monopoly rules in the early 1990s. At that time, Michelin offered rebates for retreading and replacing tyres on trucks and buses in France; something that “illegally tied dealers and foreclosed the French market”, the European Commission originally ruled in 2001.
Goodyear Dunlop Tyres UK Limited has announced that it has initiated an information and consultation process with Union Representatives regarding possible redundancies as a result of the removal of car and radial light truck tyre production at its Plant in Wolverhampton, West Midlands. The company has advised the UK Department of Trade and Industry and our Unions today that we will be ceasing production of car and radial light truck tyres in Wolverhampton and that up to 420 associates could potentially be affected. The remaining production from Wolverhampton is unaffected by this decision, with tractor tyre manufacturing and other processes used in tyre production, such as mixing, calendering and retreading, continuing on the site.
A sports car tyre retreading business has been launched in Wales. Maxsport Competition Tyres is to create up to 25 new jobs at its new tyre retread facility in Rhayader, Powys where it plans to eventually retread more than 50,000 tyres a year, primarily for the motorsport and off-road vehicle markets in Europe and Asia. The company, which has invested more than £1m in a 37,000 sq ft unit at the town’s Brynberth Industrial Estate where it currently employs nine people. Maxsport Competition Tyres is part of the Treble B Group based at Caterham, Surrey, which distributes new and retreaded tyres throughout the UK and has depots in England and South Wales. The group plans to open a new storage and distribution facility in Rhayader in the future.
Ireland, the Emerald Isle, the land that has made green its own colour, yet there is nothing much green about the waste management infrastructure North or South of the border. Waste has not been a priority problem until recently. The local authorities, certainly in the North were at one time expecting a further delay in the implementation of the Landfill Ban on whole tyres. Their reasoning was that there quite simply were no suitable alternatives available. There were no tyre shredding facilities in Ireland.
However, the UK government has in its now traditional style not only adopted the latest legislation to arise as a result of an EU directive, but is intent on implementing the new law. That is creating a peculiar scenario in Northern Ireland where, as the deadline approaches, there is still no route to disposal, save shipping them to the UK, or perhaps to the Republic. The former is costly, and the latter may not be sustainable in the long term. With nowhere to take these tyres the gate fees are bound to increase in the run up to the ban, and as the cost of disposal rises, the attraction of players to the market will also increase. However, unlike the mainland UK, there is no widespread network of retreaders or collectors seeking to expand their business into shredding. That makes the Northern Ireland situation one of interest and we spoke to Lynn Kerr, the managing director of ADCO retreading and power behind R4 Tyre Recycling in Portadown to get the lowdown on the Northern Ireland situation.
The situation in the South is similar to that in the North in that there is no widespread tyre collection service. We are advised that what competition exists does so courtesy of a loose application of the law. As in the UK, waste carriers need to be licensed, but rather than a single license giving rights to operate nationally, the licences are issued on a county basis, so to collect in County Cork and shred in Louth, one needs to hold licenses for every county between. However, Ireland has a hidden competitor in tyre collection, something it has in common with France, the agriculture sector in the republic has some 140,000 individual farmers, of whom we are informed some 80,000 might be involved in making silage. With some 40,000 tyres each year allegedly going to silage that averages out at 500 tyres per farmer. Farmers can collect without license, apparently, and there is no monitoring of their collections as of yet. This is obviously something that needs to be controlled if tyre disposal is to be legitimised and any environmentally effective recycling is to take place. The Irish government cannot expect retailers to pay the licensed tyre trader 2 Euro per tyre when they can have their local farmer take them for 50 cents a time.
Far be it from T&A to accuse Ireland’s farmers of collusion in avoiding the law, but if those figures are correct, either the agricultural sector is dumping tyres in some hidden corner of a forgotten field, or the whole of Ireland is gradually going to be covered in tyres used for silage. Ultimately, the only thing green about the Emerald Isle would be on the mould and algae growing on their rotting surfaces.
Yes, we know that times are hard for retreaders, with price pressure due to competition and raw material costs. Then there are the requirements of ECE 108 and 109 – more trouble and expense. To survive, today’s retreader has to produce a quality product that performs with the best of them and one of the keys to quality is the latest machinery. Whether it is buffing, extruding or non-destructive testing, the kit available to retreaders has become ever-more sophisticated.
Gary Oliver, managing director of car and light truck tyre retreader C-Tyres, has been appointed President of the Retread Manufacturers Association in the UK. Oliver has been heavily involved in the formation of the RMA’s Marketing & Communications Committee, whose aim is to promote and market retreading in the UK. Gary Oliver succeeds Ian Smith, of Technic Tyre, as RMA President.
“The European Truck Tyre retreading industry is healthy and provides the transport industry with high quality products which allows them to reduce tyre cost and transport cost. However, retread products are not legislatively treated equally to new tyres, and this is a growing threat to sustained growth for this industry”. The legislative problems faced by the retreading industry were outlined to T & A by Lennart Lindström – product manager at Bandag Europe – during Autopromotec 2003. The basis for the EU legislative framework is the Whole Vehicle Type Approval (WVTA) directive 70/156/EEC. This directive sets out the rules for the use and production of many vehicle parts, including tyres. Up until now, the WVTA has not taken into account the existence of retreaded tyres, nor have any of the quite numerous regulations and directives that exist for new tyres. All legislative work on tyres in the EU is solely focusing on new tyres. The WVTA does not yet exist for trucks, but work is underway to introduce this certification for trucks, and then new truck tyres must meet the same requirements. The certification principle for type approval implies that each authority grants authorisation for a vehicle, a system, a component (like tyres) and this authority remains solely responsible for the conformity of production of the certified product. For retreads ECE Regulations 108 (passenger tyres) and 109 (truck tyres) exists. Despite industry efforts to introduce ECE 108 and 109 into an EU mandatory directive, Brussels has not taken any visible initiative. In absence of the expected and desired EU directive, some member states have started to introduce ECE regulations 108 and 109 into national mandatory legislation. This is the case in France, Spain, Poland, Croatia and the Czech Republic. Other countries like the UK, Sweden and Denmark have begun the national legislative process to introduce them. This still leaves a great number of countries with no active plans to introduce these regulations. It is estimated that over 200 retread companies out of approximately 700 active companies in Western Europe have gained their ECE 109 certificate to date. Absence of equal rules creates an unfair competitive market. Bandag are suggesting that it is necessary to form a retread industry interest group, in order to proactively define potential future legislative content on matters like noise, wet traction and rolling resistance, and work in close co-operation with legislative bodies. BIPAVER and BLIC should, perhaps, take the joint initiative to the creation of such a group. The need to recruit new members to BIPAVER, including supplier members was emphasised by RMA secretariat, Sheila Ikin. This is especially relevant now that BIPAVER is focused on the interests of the retreading industry. One of the causes taken up is the unjustified ban on the importation of retreaded tyres, currently operative in 11 countries known to the RMA. There is a definite need to protect the retread industry against damaging legislation, hence the moves by BIPAVER to persuade Brussels to transpose ECE 108 and 109 from a recommendation to a directive.
Analysing some of the marketing opportunities open to the retreading industry and how it might approach a common strategy. In doing so, the retreading sector, will initially have to face the fact that as an industry it has never been in a position where it has had to design a classical marketing plan before. Retreads traditionally were taken for granted as the budget option for the tyre industry. All tyre shops stocked passenger retreads and these were automatically sold to budget oriented customers. Budget new tyres did not form a viable competition to retreads at the bottom end of the market because retreads still enjoyed a significant price advantage and many budget tyres were of poor quality. To secure a sale all retreaders needed to do was to assure good prices, good product quality and good service to the retailer. Nowadays, it is clear that these attributes alone are no longer adequate. In the truck tyre market the situation is somewhat different. Retreads have long been part of the life cycle of the tyre. The market has always been considered healthy and so the question as to whether the industry’s marketing strategy was being efficient in reaching its message to as much of the potential market as it should was seldom raised. However, with pricing issues now becoming more relevant, the issue of the optimisation of the market is becoming more critical. The impact of the downturn in car tyre retreading has been particularly severe in the UK where sales by UK retreaders fell from 4.4 million units in 1995 to around a million today, with a number of high profile retreaders being forced into receivership. This situation was exacerbated by the strength of Sterling resulting in the almost overnight disappearance of vital export markets. It has to be recognised that passenger retreads are now niche products. There is still a place for passenger retreads in Europe but, unless the generic marketing of passenger retreads is improved, the fear must be that the market will follow a similar path to the United States, where it has now almost completely disappeared. To counter this, a sample marketing plan has been drawn up, the key elements of which are as follows: A scientific research programme to ascertain the performance qualities of retreads, using the results as part of a PR campaign. Direct lobbying of government departments and public bodies with a view to highlighting the environmental message that the retreading industry wishes to portray. At government level, the aim would be to persuade individual departments to accept retreading as the best practical environmental option and to include retreads in their purchasing policy. The incorporation of tyre dealer seminars and training days. This proposal generated some considerable thought as it was felt that there was not much point wasting money trying to change the views of tyre dealers and fitters whose minds were already set on opposing the sale of retreads. Instead, the idea would be to use funds to help in the training and support of dealers who had proved themselves to be positive towards retreads. Allied to this is the decision to create a “Green Tyre Dealer Scheme” backed up with the production of a retread buyers guide. This would allow the retreading business to channel sales through dealers who support the retreading industry, thereby reducing switch selling. A promotionally effective presence at exhibitions. This would include car and truck shows as well as events frequented by the environmental lobby. A comprehensive PR campaign is proposed, aimed at the tyre trade press, environmental magazines, motoring magazines, the national and regional press and other consumer interest groups such as women’s magazines. In addition, the incorporation of a press monitoring service to measure the success of the campaign. It has also been planned to introduce a response service to react to bad press in the same way as TRIB does. For the truck and bus market an informative newsletter is suggested dealing with tyre related issues in general but, allowing plenty of scope for promoting the argument in favour of retreads. This activity is based upon the knowledge that the regular truck press is editorially light on tyre related issues and indeed rarely covers anything concerning retreads. Other activities include the design of a campaign website, the increased use of environmental newsgroups on the internet to promote retreads, the production of brochures and presentation materials for use by fleet engineers, the police, schools and tyre dealers and the production of promotional merchandising items such as cab stickers, tacho holders, mugs etc. Finally, a comprehensive but highly targeted advertising campaign focused on environmentally friendly consumers. Part of this strategy would be the promotion of the “Green Tyre Dealer Scheme” mentioned earlier. These are the main elements of a package which could make a considerable contribution towards improving sales of retreaded tyres.
Nokian has purchased the Eurobandag retreading plant, situated in St. Petersburg, Russia. Last year, net sales at the plant totalled 0.5 million Euros and the factory retreaded 2,000 truck tyres. Nokian is also re-arranging its retreading materials operations, bringing together the personnel employed at its Vianor retreading plants in Finland, Sweden and Norway under one profit centre.
This is an eventful time for the tyre industry when it comes to tyre disposal. The landfill bans are creeping ever nearer, the End of Life Vehicle Directive looms and retreading – for so long one of the main avenues of disposal – is far from buoyant. Then there is the row over the definition of waste, which is exercising the minds of many would-be recyclers and, they say, hampering their efforts to deal with scrap tyres effectively. On top of all this, in the UK the Government has asked the tyre industry to think again about producer responsibility after rejecting their original ideas. An eventful time indeed.
Visit almost any tyre retreading plant and there is a very strong chance that there will be at least one item of Marangoni tyre building equipment installed at the factory. Marangoni Meccanica is probably the best known retread equipment manufacturer in the world. This division of Marangoni is housed in the original Marangoni factory at Rovereto and grew out of the company’s need to produce equipment to help progress its own retreading operations.
Good 4Q sales have helped Nokian to increase turnover and profits for last year. Sales rose 13.2 per cent to 479.2 million Euros (2001: 423.4 m). Operating profit was up at 60.1 million Euros (2001: 50.1 m) and profit before taxes rose 29.5 per cent to 48 million Euros (2001: 37 m). Sales from car tyres were up 17.5 per cent to 242.8 million Euros (2001: 206.6 m) and operating profit rose 10 million to 51.4 million Euros. Much of the tyre sales (73 per cent) came from winter tyres. There were increases too in sales of heavy tyres and bicycle tyres, but sales of retreading materials slipped slightly. The Vianor chain also showed an increase in turnover and profit.
In the UK, the Retread Manufacturers Association (RMA) has announced that it is to leave the Tyre Industry Council (TIC). RMA Director Sheila Ikin said that, while the association still supported the principles of the TIC, it felt that it was more appropriate to concentrate its resources more directly on retreading and the RMA’s growing involvement in Europe with the Bipaver retreading division. Brian Smith, TIC Chairman, said that he regretted the withdrawal of the retreaders, but he understood that changing circumstances have presented them with different challenges and opportunities.
As reported in T&A RFID tyre identification systems are about to become an element of tyre production and management. After testing on truck and earthmover tyres, Michelin has begun fleet testing of Radio Frequency Identification tagging on passenger car and light truck tyres. The technology allows the tyre identification number to be associated with the vehicle identification number (VIN) making the tyres uniquely identifiable with an individual vehicle, telling when and where the tyre was made, maximum inflation pressure, tyre size, etc.. The ability to identify and track individual tyres through their life cycle has attractions for tyre management services, but ultimately may have applications in the control of the tyre life cycle, including retreading and recovery.
Sarawak’s Natural Resources and Environment Board claims that there is no market for the recycled products from the scrap tyres and that retreading was not economically viable. Crumb rubber which can be used for many purposes has a market value of only 75 per cent of its production cost. Sarawak, has no system developed or legislation formulated to promote and regulate scrap tyre disposal and recycling issues. Malaysia produces about 14 million pieces of used tyres per year and the number is increasing at a rate of 10 to 15 percent.
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