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KAZAKHSTAN
Retreading Struggling in Kazakhstan
Kazakhstan is building a new capital as it builds a modern country in an ancient land
retreading industr y is also due to the shortage of casings. Due to the overwhelming use of cheap tyres till the ver y end of their life, the country’s small retreaders hardly find any suitable casings to retread. “People reduce the tyre to a carcass, leaving nothing in the tyre at all. People are not ready to understand the concept of retreading,” Oleg Savchenko of AS Trans argued. He is willing to buy good casings from the market but they are barely available. But the import of casings could be an
option as the Karaganda Tire Repair Factory imports used casings from Germany, retreads and sells in the Kazakhstan market. However, with low production and battling for survival, retreaders may not be so adventurous as to import casings. It is accepted that retreading has not been understood by the local people as Almaty had four retreading plants. All failed to retread tyres properly and were forced to close down ruining the name of retreading before it found its feet in the market. A retreading plant also opened in the city of Chimkent, capital of South
K azakhstan province and regarded as the most populous city after Almaty and Astana. The plant was a Kazak-China venture. The plant operated whilst the Chinese managed it. Once they left the plant was forced to be closed down as the local partner failed to
learn the finer points of retreading. Another plant in Aktobe is also on the verge of closure. Therefore, retreading has entered the countr y but has not been nurtured properly by local entrepreneurs.
Moreover, tyre retreading has not become popular due to virtually no support even from the government run transport companies. Normally, state owned companies use retreaded tyres but this nation’s cash-rich government companies prefer to use new tyres and are not willing to listen to retreaders. “We have visited private and government bus and truck operators and explained to them how to get their tyres retreaded but they are not convinced, they continue to prefer the cheap tyre options easily available in this market,” complained Aman Sitdikov of ABS – 1 based at Uralsk. Moreover, the price difference between the cheap tyre and retreaded tyres is not prohibitive and retread tyres have yet to win the market’s confidence or acceptability.
The players still in the game are expecting a long wait till the market matures enough to understand the concept properly. Now, the retreaders are banking on radialisation of the market, as that is friendly to retreading. “This market is largely still dominated by cross-ply tyres whilst radials have a low market penetration. We are convincing people to understand that a good radial has a much longer life and could be retreaded more than once,” Onur Aydin explained. Chinese tyres are not considered to be as suitable for retreading as they are diagonal belted compared to radials manufactured by Michelin, which are retreading friendly.
Driving from Karaganda to the newly built capital of Kazakhstan, Astana, the highway is comparatively good and is loaded with foreign traffic crossing the country. It seems that this landlocked country has completed a makeover and is stepping out on the path of a market economy. It seems the current government in Kazakhstan quickly decided to come out of the shadow of its Soviet past as one of the first major steps announced by the government was to build a whole new capital. Almaty was the capital when Kazakhstan used to be part of Soviet Union and Astana emerged as a new modern capital of this growing and mineral rich mining country. Today, the country with a population of 17 million people is regarded as the safest bet in the CIS states, politically stable and growing peacefully. Cash flows in return for mining contracts given to multinational companies in a country that hardly produces anything due long winter spells. The country has mines for coal, copper, aluminum, iron, uranium, petroleum, natural gas etc.
The government opened the borders for the import of foreign brand tyres in 1991 and premium brands like Bridgestone, Goodyear and Michelin started entering the market. “But in the last two decades the size of the premium brands’ share has barely grown to 16 per cent,” said Onur Aydin, Director, KAZ T-REMA International. According to independent sources, Kazakhstan’s annual truck/bus tyre replacement market is around
250,000 in 2009, it is now estimated to be around 300,000 tyres annually growing at the rate of around 10 per cent per year. Around 84 per cent of the market is controlled by Russian and Chinese tyre brands followed by the Belorussian brands Belshina and Omskshina. It has been noted that the annual OTR replacement market is around 14,000 pieces, again a majority of around 80 per cent are Russian and Chinese made the rest, up to 20 per cent are from premium brands. Besides the TATKO OTR retread plant in K araganda, Zhezkazgan has another OTR plant.
Though the concept of retreading is struggling and at its very early stages of development there is hope for it in the future as there is an example of running the plant successfully and even of planned expansion.
A big fleet owner based at
K araganda realised the importance of retreading its own tyres to cut increasing overheads from its expanding bus fleet and decided to set up its own retreading plant on the outskirts of Karaganda. “We are operating one of the biggest bus fleet in Kazakhstan with around 600 buses from Man, Mercedes etc. We feel it is a good idea to have our own retreading plant to cut overheads,” said Islam Mamedov of Karaganda Tire Repair factory. It should be possible that a few more plants of this size and nature could flourish in this countr y and retreading would start finding a few more takers. The struggling state of the
Kazakhstan today is crossed by long flat and good quality highways
34 Retreading Business