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SAUDI ARABIA
Mike Emanuel, Consultant in setting up the Tyre Solution Factory for Al Sheikh on behalf of Marangoni in Dammam
Al-Sheikh – Marangoni Partner in Saudi Arabia
take some more time.”
Among the biggest challenges in the Saudi retreading industry remains educating drivers to take care of their tyres and get the maximum out of them. “Instead drivers are destroying the truck tyres, the biggest investment made by the transport company. We have to convince and prove to the transporters that they could make big savings by adopting retreading,” Mike explained. He also noted that finding casings good enough for retreading is also a major problem.
The Saudi venture would be catered for by either the Italian plant or Marangoni’s UK based distributor. Marangoni has no manufacturing
plant in the UK but the Saudi plant would most likely to be catered for by the UK offices. Marangoni also has plans to introduce its Tyre Management System in Saudi Arabia. “We have to introduce the TMS to hauliers. Once the market picks up, it is an absolute necessity to bring out the best results,” Mike believes. He has done some preliminary homework after meeting some of the biggest fleet owners having 1000 or more trucks. “These transporters are making huge investments in tyres annually and if they use a proper monitoring system, they will end up saving 20 per cent of their annual investment,” he stressed.
Marangoni is making significant in- roads in the Middle Eastern market. The Italian company is setting up a retreading plant in Saudi Arabia for its partner Al Sheikh. The kingdom is regarded as the largest tyre market in the Middle East. Bandag’s loss in Kuwait is again advantage to Marangoni, with Kuwait’s longest surviving retreading company becoming a new partner for Marangoni in Kuwait. Marangoni also finds itself opening in Bahrain due to its Kuwait based partner. Therefore, Marangoni is spreading its influence in the region on the strength of some interesting deals that have come its way in recent years.
The Italian company is setting up state-of-the-art retreading plants on the outskirts of Dammam. “Our partner, the Al Sheikh Group in Saudi Arabia, is making a total investment of around US$ 3.5 million in the upcoming plant. Al Sheikh is investing around US$ 2 million in equipment alone out of the US$ 3.5 million investment,” admitted Mike Emanuel, the consultant setting up the Tyre Solution Factory for Al Sheikh on behalf of Marangoni in Dammam. He also claimed, “This is going to be the biggest Marangoni plant in the Middle East.”
Mike has been stationed in Dammam for quite some time, keeping a close watch on the developments at the new Marangoni venture in Industrial City-II. He has been so devoted to the project, when most Westerners are flying back to their homes in Europe on the New Year’s Eve, he prefers to stay in Dammam. “The equipment is on the way and was expected at the port around early January, we have to
prepare the ground to make the installations on schedule,” said Mike, who hails from England where his father set up a retreading plant in London way back in 1950. Mike can often be found, standing at a distance keenly watching the Philippinos working at the plant, it looks like the project is Mike’s baby and he is nurturing it for the future. Unfolding the project drawing, Mike explained the location of plant machinery. “The plant will have two 21 tyre chambers, one 4 tyre chamber, Shearography machine, inflation testing machine, spray booth etc,” Mike stated. It is going to be a completely automated plant with monorail system. Initially, the plant capacity is to retread around 150 tyres per day, but the capacity would later be doubled to 300 tyres a day. “We may commence a second shift, if the demand picks up,” Mike added. The plant is likely to be fully operational by the middle of 2012. Marangoni is open to the idea of setting up more such plants in other parts of Saudi Arabia. “Our partners would be more than happy to set up this type of plant in other parts of Saudi Arabia, if retreading picked in future,” Mike claimed. When asked if any other region of the country is on the radar for similar kind of plant, Mike revealed, “Jeddah would be most likely location of the next plant.” Retreading is still not popular in Saudi Arabia compared to the new tyre market. “The retreading market is merely 100,000 tyres annually compared to a more than 2 million new truck tyre market in Saudi Arabia,” estimated Mike. However, he is optimistic about the future of the Saudi market, “There is a lot of opportunity in this market. Retreading is picking up but it may
One of the biggest players in the Saudi Retreading industry, the Al Dobowi group company, General Retreads is considering opening its third plant. The company that controls a 20 per cent market share in the Saudi retreading market is looking at the country’s capital Riyadh as its next location. “We are considering opening a retreading plant in Riyadh in a year’s time,” said Mr Jasjeev Singh Kandhari of Al Dobowi.
Currently, General Retread has two plants, one in Dammam opened five years ago, and one in Jeddah, a new plant opened in 2010. The company expects demand to grow in the next five years with the awareness about retreading rising in Saudi Arabia. “We have identified some potential in the Riyadh market. The market is growing as smaller companies are now opening plants in Riyadh and we need to be present in that market,” Jasjeev said. The existing plants in Dammam cater to the Eastern part of the country, Jeddah serves the Western part and the upcoming plant in Riyadh would feed the Central region.
General Retread has been educating fleet owners for many years to encourage retreading. “Retreading has a terrible name; synonymous with poor quality and we are trying to dispel the notion,” said Khandhari. The company is now promoting a tyre management solution General Fleet Solution (GFS)
amongst the fleet owners. “ GFS should help them to understand the cost per km concept,” he thinks. Saudi Arabia has grown to become the second largest retreading market in the Middle East after the UAE but it is almost four times the size of the UAE market for new tyres.
The company is chalking out an aggressive plan to promote GFS amongst fleet owners in the Saudi market. It is also gearing itself up to market the GFS. “We are doubling the workforce, planning to hire 30-40 people in production, sales and services,” Kandhari stated. He also explained the cradle to grave theory, “We are projecting ourselves as a one stop shop starting with new tyres, retreading, repair and GFS. These are the key features of our business that differentiate us from others.” The company claimed to be able to demonstrate the lowest cost per km.
General Retread is working hard in promoting GFS among the Saudi fleet owners. To begin with, it has checked tyre inflation in around 40,000 tyres in the last couple of years. “Merely 30 per cent have the right pressure,” quipped Luc Slembrouck, Business Development Manager, General Retreads. The tyres are not properly cared for in this market. Luc is the driving force behind company’s GFS – the Tyre Management Solutions TMS designed by Brazil-based
30 Retreading Business
General Retread to Focus on GFS