Page 40 - RB-63-12-4

THAILAND
Raymond Hui, Managing Director, KRI
Yuan Karn Yang Plans to Double Output
While considering a visit to Thailand, language was never thought to be a barrier considering the country’s image as favoured tourist destination all over the world. It may be okay if one is in Bangkok or in beach resort in Pattaya, otherwise, language is a major problem, there are few who speak English. Most of the time my driver, Joy, came to my rescue as he knew English and acted as a translator.
Yuan Karn Yang
Retread Co can be
found next to a
highway some 260 km
from Bangkok at
Nakronratchasima.
Yuan Karn Yang plans
to double production
by the end of next
year. “We have ordered
some more equipment
from Newera,
Singapore,” informed
Yuan Karn in broken
English. His dedicated
precure plant retreads
around 2000 tyres per
month. It was set up
around four years ago and consumes about 15-20 tonnes of locally made Indra Rubber every month. “Indra Rubber has a good quality, suitable for the road conditions in Thailand,” he added. The neatly run retreading unit on the first floor has two tyre chambers of 16 and 24 tyres respectively.
When asked about the equipment it has recently ordered, he replied, “We have ordered a Bosch mini extruder and MEA outer envelopes from Newera recently. They should arrive
next month.”
Yuan Karn Yang plans to steadily increase production and not just jump to double the production in one go. “We can increase the production anytime. Currently, we are more focused on quality and will increase the production in a phased manner,” Yuan said. The company sells a number of Chinese tyre brands in the Thai market and plans to set up a Bridgestone truck tyre
service centre soon.
The company only retreads bus and truck radials and has no plans to start retreading OTRs. “We have no plans to get into the OTR retreading as it is mostly done by the hot process in Thailand and we are running a dedicated precure plant,” Yuan replied. The company, however, does repair OTR tyres and gets them retreaded from other retreaders. It also deals in old casings and sells them to other retreaders.
Yuan Karn Yang
40 Retreading Business
KRI Expanding Precure Plant
replied, “Both have good quality but we are still using liner from Indra. However, we have marginalised Indra to some specific patterns that are not available with the Malaysian brands.” Moreover, previously the company retreaded 200-300 tyres per month but when the volume picked up it looked for more options. The company retreads 95 per cent of its tyres with Kayel and Eversafe liners, both have almost the same share in its total volume and it is not overtly dependent on one brand, giving it room for price manoeuvre with its rubber suppliers.
It is the better payment terms with the Malaysian companies that made them the preferred option. “There was no credit when consumption was low but
with higher volumes credit terms liberalised and made it more favorable for us,” Hui replied. It imports about one and half containers of liner every alternate month.
KRI feels the scarcity of good casings and long credit terms are some of the major challenges for the retreading industry in Thailand. “Our country does not allow the import of casings, exposing us to the agents that collect casings from the market and these agents sell them to the retreaders after pocketing their cut,” explains Hui. Moreover, long term credit expectations keep capital stuck in the market as merely 5 per cent of the company’s business is in cash and the rest on long credit terms ranging from 30, 45 and up to 60 days.
Thailand’s retreading companies are expanding their operations and are buying new equipment to meet the growing demand for retread tyres. Driving out in the suburbs of the Thai capital of Bangkok to a location called Samutsakorn, I arrived at Kasem Rungraung Industry Co Ltd (KRI), where an all new tyre chamber had also arrived, which is about to play a key role in the company’s expansion plans in the near future. “We bought the adjoining plot as part of our expansion plan and now the building is under construction,” explains the softly spoken Raymond Hui, Managing Director, KRI. He further said, “Our facility is cramped with equipment and tyres and the plant expansion has been planned to provide more space and also accommodate the new tyre chamber.”
KRI is operating a dedicated precure plant round-the-clock on one 13 tyre chamber from Newera. Currently, KRI retreads 2000 tyres per month and when the new 24 tyre chamber from Newera becomes operational by next month in the expanded plant, the production is likely to pick-up to around 2,800 tyres per month. “We will soon order a Matteuzzi buffing machine to be installed next year. We are targeting a monthly production of 4,000 tyres from next year,” said Raymond Hui.
Interestingly, the company is also planning to set up one more retreading plant in Northern Thailand, in a location called
Mae Sot, near the Myanmar border. The company is eyeing the regional markets with the coming-up of the regional bloc Asian Economic Community (AEC) in 2015. The AEC would bring more integrated financial markets, freer flows of labour, streamlined customs procedures and better transportation links to 600 million people of the region. Among the members of the regional bloc are several under- developed countries and also lucrative markets like Myanmar, Laos and Cambodia. “We may set up a plant in the next 2-3 years in Mae Sot. We have a garment factory there and some vacant land, where the proposed retreading factory would be set up to cater for the markets of the adjoining countries once the AEC gathers momentum,” Raymond Hui believes. KRI plans to export retreaded casings to the regional bloc market.
KRI set up the precure retread plant in 2004. Though the majority of the retreading factories in Thailand simultaneously operate the traditional hot and the modern cold retread processes from the same plant. “We never thought of getting into the hot process and kept our focus on the precure version of retreading,” stressed Raymond Hui. The company uses Malaysian liners like Kayel and Eversafe. Though it started with the local liner from Indra Rubber but later shifted to the Malaysian liners. When asked reason of shift towards Malaysian liners, Hui