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SAUDI ARABIA
Top Tyres Ventures Into OTR Retreading
Top Tyres is also planning to expand its facility further considering the huge potential in the Saudi market. “Since we do not have much space here, we are looking for an adjoining shed. Once we get the shed, we will expand in order to gear ourselves for the growing market,” Shukoor stated. Currently, the company is running the
February 2012,” he revealed. The company retreads tyres with Supercool and Midas tread and also supplies Midas tread within the Saudi market.
Commenting on the challenges in the Saudi market, Shukoor said, “Casing availability is a major problem as most of the customers do not remove
Abdul Shukoor of
Top Tyres Retreaders & Traders
If the global majors are setting up their bases in Saudi Arabia with an eye on its huge potential, the mid- level players are also adding capacity or foraying into new areas. Dammam based Top Tyres is planning a foray into OTR retreading. Currently, it retreads truck tyres by the precure process only.
“We are planning to start OTR retreading by the hot process by the middle of 2012. We will carry out the hot process by segmented mould,”
said Abdul Shukoor of Top Tyres Retreaders and Traders. Segmented moulds are designed for steel radials. He further added, “We are in touch with some companies in India and China to provide the moulds for us.” The company has already started OTR repairing with Monoflex and Rema Tip-Top. Top Tyres commenced operation in 2005 and has two 8 tyre chambers, retreading 1000 – 1100 tyres per month and servicing the area in a 200 km radius around Dammam.
operation on plant imported from India.
Top Tyre is working on installing a full monorail system along with a buffer and builders for retreading super singles. “We will have a complete monorail system operational by
tyres before they are completely spoilt.” Regarding opportunities, Shukkor observed, “The surge in construction activities on various government projects should only benefit the retreading industry.”
Michelin
Retreads Looks South for Expansion
Saudi Arabia is among the few countries in the Middle East enjoying the presence of four major global retreading brands. Michelin too has had a presence in the country since 2005. The French company has also brought its retreading technology to the country through the Michelin Retread Company. “We have two plants in Dammam and Jeddah retreading about 30,000 tyres annually. Both the plants are operating almost on the same production levels,” informed Mohammed Yabroud, Managing Director, Michelin Retread Company. Both the Jeddah and Dammam plants have got two 18 tyre chambers each.
Over the years the competition has grown considerably in Saudi Arabia. “Currently, around 15 plants are operational in Saudi Arabia and all kinds of prominent technologies and brands are available,” said Yabroud. But more retreaders also bring unfair competition. “We have invested a lot of money in setting up plants bringing in the best technology in the business but the smaller players have invested the bare minimum and are competing with us offering retreading at a much lower cost. They are not well-equipped and bring a bad name to the whole
concept,” complained Yabroud.
With the surge in the infrastructure building carried out by the government retreading is likely to see a much needed boost in near future. Retreading companies view this as an opportunity for growth and some of them have already announced plans for expansion, whilst others are investing in all new plants. “We have a presence in the eastern and western parts of the country with our two plants. We are planning for a third plant somewhere in the Southern region of the country. Though we have not yet taken any firm decision regarding the timeline for setting up the third plant. Whenever we will decide, it would be in the southern part of Saudi Arabia,” Yabroud clarified.
The retreading companies in Saudi Arabia are sure that the retreading industry will grow in the years to come. “We have altogether made around 120,000 tyres in 2010. That compares to a new tyre market in excess of 1 million tyres. We are still a long way behind the new tyre market. We are sure to record considerable growth in the next five years and hope to cover some ground to grow the market share for retreading,” Mohammed Yabroud believes.
Riyadh Retreading to Hike Production
Saudi Arabia’s capital Riyadh is also emerging as an important retreading centre in the country alongside the cities of Dammam and Jeddah. The capital is home to four plants including the Riyadh Retreading Company, which retreads about 500 tyres per month. The company plans to hike production to 800 tyres in view of the increasing demand. “Saudi Arabia is a big market and retreading is getting popular. The market is now expanding,” believes Ayed Al Rashed, Managing Director, Riyadh Retreading Company. “Production is likely to go up by second half of 2012”.
Riyadh Retreading Company has one 22 tyre chamber sourced from Italmatic. It also does OTR repairs but has no plans to expand into OTR retreading. When questioned about the market the company suggested that Saudi Arabia is almost a 1.2 million new tyre market but the penetration of retreading is very low. Al Rashed stated, “The truck operators are not directly involved. It is middle level management that comes into direct contact with us and they discouraged retreading. They have a negative perception about retreading and believe if any problems
come with the retreaded tyre, they would be blamed. Therefore, they prefer new tyres over the retreaded ones. Moreover, there is no proper care for tyres as the owners are not driving the trucks and drivers are less concerned about tyre care,” said a concerned Ayed Al Rashed. The tyres are not properly cared for, resulting in high rejection rates and a shortage of suitable casings for retreading.
As observed during this Saudi visit, it is one of the biggest tyre markets in the Middle East and the only means to commute between various parts of the country is either by road or air. “We have a huge market and the only means of transporting goods is by trucks. We do not have a railway network,” Ayed Al Rashed said. Moreover, the number of retreading plants is less than might be expected in a tyre market of this size, but that is wholly down to the low level of interest in retreaded tyres. “The progress of the industry is very slow and it will take some time before it will be considered as a viable option to new tyre,” Ayed thinks.
Riyadh Retreading Company imports Vipal tread from Brazil.
32 Retreading Business