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THAILAND
Thailand Retreaders Move To Precure
Thailand’s retreading industry is shifting towards the precure process, though it remains predominantly a hot cure market at the moment. The major part of the medium and small players in the Thai hinterland have mainly hot cure operations. Even the bigger players like Muang Ngarm have a majority hot cure business. According to the man who set up the first precure retreading plant in Thailand Vorasak Thongnopnua, Managing Director, Bumrungyang, “the hot process still has the lions’ share of 70 per cent. It still has a large market in Thailand and is here to stay for some more time.” But there is a perceptable shift towards precure retreading. The bigger players have been quick to change and are making investments in expanding their precure operations. Industry major Indra completely stopped hot cure retreading couple of months back. “The radial tyre share is swelling and in another 2-3 years the share will sink further. The future is with the precure process and we are expanding in that segment,” commented Somchai Mongkoladisai, Managing Director, Indra Machinery Co Ltd. Interestingly, the bigger players are looking beyond the domestic market
and are planning to enter into the export market in a big way with the establishment of the Asian Economic Community (AEC) in the next few years. Sompong Rubber also plans to focus aggressively on the export market. “The regional grouping of the Asian Economic Community is coming up in 2015. We have plans to spread our export market to other group countries,” said Wittaya Sakoldiloke, Asst Managing Director, Sompong Rubber Retreading Co Ltd. Indra, meanwhile, is more focused on the domestic market. “We are concentrating on the domestic market because, as retreading develops in Thailand, more retreaders are entering the industry every year,” says Somchai.
Expansion is not confined to the bigger players. Even middle level players are buying equipment to expand their precure capacities. KRI bought a new 24 tyre chamber from Newera, while another significant player Kitkarn have ordered a couple of tyre chambers with Acten. It has been observed that Newera focused heavily on the Thai retreading industry and has sold lot of machinery in the country. It has been known that a Newera representative
visits the country every alternate month and travels to all the retreading companies. The effort has really paid- off as almost every plant has machinery from Newera.
The bigger companies are making investments in building tread making capacities. A couple of big players are almost doubling their precure liner capacity to meet the growing demand and some have plans to expand in the near future. Chonburi based Bumrungyang is planning to hike liner production in the next few years, while Sampong and Indra are already in the midst of expanding liner capacities. “Currently, we are manufacturing 2,900 tonnes of tread rubber annually. With the growing demand of precure rubber in the Thai market, we are planning to further ramp-up the tread production to 4,600 tonnes by the end of 2013,” informed Wittaya Sakoldiloke, of Sompong Rubber. Indra is into all round expansion as it plans to increase the liner production to more than double its current level.
Labour shortage is another major issue in Thailand as local manpower prefers to work in a cleaner environment so most of the retreading industry is dependent upon external
labour from adjoining poor countries like Cambodia, Laos, Myanmar etc.. Bumrungyang is one of those facing labour shortages. When asked about plans to raise the production level, Vorasak replied, “The local Thai people ask for higher wages and do not like to work in retreading plants. There is a shortage of manpower, otherwise we could hike the production level anytime.”
Thailand has about 55 retreading plants spread throughout the country. Chonburi, which is about 70 km from the country’s capital Bangkok is home to almost half of Thailand’s retreading industry, about two dozen plants in total. “Chonburi is a big logistics centre on the Eastern seaport. More than 90 per cent of container traffic that comes to Thailand stops at Chonburi making it one of the biggest transportation hubs in the country. About 22 retreading companies have their plants in Chonburi,” informed Somchai Mongkoladisai. As per independent estimates, Thailand has about a 2 million light and heavy truck tyre market annually and about 1.5 million bus and truck tyres are retreaded annually.
Euro Tyre Improving Volumes
Euro Tyre is a business partner of GIIB, Malaysia, using the Supercool tread liner along with helping GIIB to spread product visibility in the Thai market. Euro Tyre set up its plant in 2003 and has been using Supercool rubber ever since in one of the most well-organised precure plants in Thailand. “We, on average, retread about 2,000 tyres per month. Our volumes may not be very big as Supercool supplies only the premium tread to this market whereas people often ask for something cheap
the version to cater to the price- sensitive market, particularly on Chinese tyres, otherwise, we use the premium version.”
Euro Tyre has also started supplying Supercool to other smaller retreaders in order to improve product visibility. The company has initiated a few smaller retreaders in different parts of the country to shift towards Supercool. Over the years the product has picked- up despite high prices in the price sensitive hot cure market. When asked
to compare Supercool with Michelin in the Thai market, Pichit says “They are only high priced, whereas, we have better market share.”
Meanwhile, Euro Tyre is aiming for even higher production levels from next year. “Supercool has shown good market acceptability leading to improvements in
the volumes for this year. We are targeting retreading 3,000 tyres per month from 2013,” Pichit said. The company could even expand more but a shortage of labour is forcing it to increase slowly and steadily. “It is difficult to find a trained Thai workforce, we are running the operation on labour from Myanmar
and Cambodia,” Pichit said.
Euro Tyre is the first retreading company in Thailand to introduce a tyre management system to the market. The company offers software free of charge in return for business. “We introduced the tyre management system around four years ago and now the fleet owners have realised the benefit of such system as it is easy to use and gives an accurate cost per km performance analysis,” explained Pichit. Euro Tyre is strict with fleet managers to implement the tyre management system properly, as it is of no use if the readings are not taken properly.
The company has computerised the whole retreading process by a unique Radio Frequency Identification (RFID) system right from the inspection of the tyre, when a microchip that transmits the signals is embedded in the tyre and
it remain stays there throughout the tyre life cycle. The chip is fed with data from the tyre at every step of the retreading process and it can be connected through any smartphone. Euro Tyre runs one of the neatest and cleanest as well as best-organised modern retreading plants around 100 km South of Bangkok. It has Italmatic equipment and one 25 tyre chamber. “We could manage to retread up to 3,000 tyres per month by the one existing chamber,” Pichit said. Euro Tyre also get OTRs retreaded at the GIIB, Big Wheel plant at Nilai, Malaysia. It collects casings of the size 27/49 and has them transported to Malaysia. “We have been getting the OTRs retreaded for the last four years. We have already retreaded around 40 OTRs this year and about 100 cumulative in last four years,’ said Pichit.
Pichit Lertudomtana, Managing Director Euro Tyre
or low-end,” said Pichit Lertudomtana, Managing Director, Euro Tyre. Later, Supercool started supplying the liner in a competitive price bracket to cater for the lower market too. “The two quality strategy worked well as it helped in improving volumes to the current level.” Pichit stated. He further said, “If the casing is in bad shape, we apply
Indra on an Expansion Spree
38 Retreading Business
On the second day of my Thai journey, my taxi arrived early in the morning and I was driven, about 50 km outside Bangkok to Nonthoburi to meet one of the most dynamic personalities of the Thai retreading industr y, who is successfully running the most diversified groups in the
sector. When I reached the factory, I saw the man standing barefoot in front of his office smiling and welcoming me. We exchanged the pleasantries and he asked me to remove my shoes as well, I obliged and we entered into the conference room.