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INDONESIA
Putra Arezda Purnama Hope to Regain Lost Ground by 2014
Chinese tyres continue to pose a challenge to the retreading industry globally. Low priced new Chinese tyres are often preferred against retreads in price sensitive markets like Indonesia. The presence of all kinds of Chinese tyre brands in the Indonesian market is hurting the retreading industr y and their overwhelming presence has started being reflected in the lowering of production of some of the biggest retreaders in Indonesia. “We
were retreading around 8,000 tyres per month till last year, but now the production has gone down to 5,000 tyres in a month,” said Linah, Marketing Manager, PT. Putra Arezda Purnama.
The overwhelming presence of Chinese tyre brands is also creating a shortage of suitable casings for retreading. “Moreover, the price difference between the new Chinese tyre and a retreaded tyre is merely 30 per cent. Therefore, fleet owners prefer new Chinese tyres over expensive new tyres or retreaded tyres,” complained Linah. The company is also educating transporters at crude palm oil plantations to take care of their tyres. “But they
month from Goodway depending upon demand, ,” informed Linah.
Putra Arezda Purnama observed positive trends in the market recently, that may improve the market scenario in the near future and have a positive impact on its sales. “Rubber plantations are growing, as are other key sectors like transportation, coal mining and cargo movement, which are all recording positive trends. We hope that the positive trends in these sectors will also improve our sales,” she said. When asked when sales could rebound, Linah stated, “We are trying to get back to last year’s level and hope to regain the lost ground by early 2014.”
The retreading company revived a retreading unit in K alimantan in Indonesian Borneo. Located in Java, Borneo is the third largest island in the world and the largest in Asia. “It used to be an OTR plant but after the revival, we have widened the portfolio to add bus and truck tyres too. Putra Arezda Purnama finds that the market has become highly competitive in the past five years. The company sees that the
Linah, Marketing Manager, PT. Putra Arezda Purnama with Natal P L Tobing of Handal Kuat Ban
continue to use tyres till ever y layer of the casing is worn out and the tyre is damaged completely,” she explained. Interestingly, Putra Arezda Purnama is the first retreading company visited by this correspondent which sources tread from outside Indonesia. Otherwise, all other retreaders are either manufacturing themselves or source locally. It important to mention that the Medan based retreader is using a high end international tread brand in a market, which is highly price-sensitive. “We are buying 2-3 containers every
market is flooded with Chinese tyre brands and also there are a lot of new players entering into the industr y making it more competitive. Interestingly, Putra Arezda Purnama also deals in new tyres and offers discounts in retreading to new tyre buyers. “We offer 20 per cent discount to new tyre customers if they come back to get the tyres retreaded by us,” she stated. In order to maintain its clientele, the company also offers mobile service to collect and deliver tyres.
is
Rocky Hendrawan W, Managing Director, Supranusa Rubber
plant capacity. “We have the capacity to produce 300 tonnes per month but we are manufacturing around 150 tonnes depending upon consumption. We are also exporting some quantity to the
early 2014.
Supranusa’s multiple plant strategy should help it to run the mother plant to its full capacity. “We are setting-up retreading plants to run the tread making plant to its full
foreign market, which we have been developing for sometime now,” he explained. Currently, the firm exports a few containers to Turkey and Europe. Supranusa is planning to focus more on the export market to increase volumes “We are looking for newer markets for exports and hope to increase the export volume from this year,” added Rocky.
The company forayed into retreading tyres about a year ago. “We retread 1000 – 1,500 tyres per month by both hot and precure processes. The share of traditional hot process is small as the market is fast moving towards the precure process,” he said.
Interestingly, Supranusa plans to expand ambitiously by setting-up a few retreading plants in different parts of Indonesia over the next few years. “We are working on a strategy to have multiple plants in various parts of the countr y,” Rocky said. The company plans to have two retreading plants initially. When asked if the location of the plants had been decided, Rocky said, “We have not decided the location of the plant as yet. We are working on strategy to set-up two retreading plants every year. But we have to take into account the prevailing market conditions before embarking on expansion.” Supranusa hopes to set-up one retreading plant by the end of 2013 and the next in
capacity,” he said. It offers two types of tread in the domestic market – premium priced ‘Supra Track’ and price sensitive ‘Supra Eco’.
Indonesia is a highly competitive market with tyre retreading becoming ever more popular leading to smaller players joining the industr y
ever y year. “One or two plants are coming here and there ever y year making the market more competitive,” Rocky believes. When asked about any plans of entering into the OTR retreading, he replied, “We are keen to further widen our product portfolio but difficult market conditions are not allowing us to venture into OTR retreading.” However, Supranusa has shown interest in supplying bigger size moulds to the Far-Eastern market.
The Indonesian market is flooded with the Chinese tyres and it is always a challenge to find suitable casings for retreading. “The majority of the Chinese tyres cannot be retreaded at all. Moreover, due to increasing competition, flexible payment terms are doled out by retreaders for as long as six months,” Rocky complained.
As per independent estimates, the tyre market in Java and Sumatra is worth around 30,000 to 40,000 tyres combined.
38 Retreading Business