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MIDDLE EAST
Retreading is legitimate business in Saudi, but standards are high and the authorities are clamping down on poor quality operations
Australia has Shifted from Manufacturing to Retreading
Research and Markets has announced the addition of the "Tyre Manufacturing in Australia" report to their offering. The report highlights the demise of tyre manufacturing in Australia and the growing importance of retreading in the country.
This report covers the scope, size, disposition and growth of the industry including the key sensitivities and success factors. Also included are five year
industry forecasts, growth rates and an analysis of the industry’s key players and their market shares.
Research and Markets claims to be the world's leading source for international market research reports and market data. The company provides the latest data on international and regional markets, key industries, the top companies, new products and the latest trends.
Saudi Clamps Down
not more than one year from the date of sale.
This has allowed companies, according to the Saudi press, largely from Italy and Germany to enter the market with equipment that varies from $20,000 to half a million dollars. They then ask, who pays when these factories do not comply with the minimum standards and specifications? And how are licenses granted with there is a lack of appropriate mechanisms for storage or lack of commitment to safety procedures?
The Saudi Gazette stated, “According to the ministry, the factories that were closed down had permission to recycle and renew tyres of trucks provided that the used tyres are renewable and in compliance with industry standards. “SASO has issued 24 standards with regard to tyres and rims with the objective of protecting lives and property as well minimising accidents. The standards include several conditions and technical specifications for tyres such as specifying date of manufacture, load and speed ratings.
“These standards also specify that the age of a tyre should not exceed
two years for cars, buses and light trucks and two and a half years for heavy trucks. There is also a condition that the agent of the vehicle or distributor of tyres should offer consumers a minimum one- year warranty.
“Many have said it is high time to establish factories for tyres in line with the standards set by SASO and have also called for laws to halt the flow of cheap and low quality tyres in the local market.”
There are also questions about the quality of the casings, about the potential for damaged casings to be used and poor quality casings and retreading that will produce dangerous tyres that will be driven at speed on the nation’s roads. There is a clear ambiguity in the Saudi market as to the legality and the compliance of retreaded tyres and until this dichotomy has been addressed the brakes will be firmly in place on the development of tyre retreading.
However, the recycling of tyre rubber is strongly supported and one can almost imagine the desert being turned into some vast rubber coated playground or sports field.
More than ten retread factories shut down within two months. There appears to be some confusion in Saudi, with some firms investing in retreading, whilst at the same time the Saudi authorities are tightening controls and closing down what they claim to be illegal operations. The authorities describe the
Organization for Standardisation and Metrology (SASO) has launched a comprehensive campaign in all regions of the Kingdom to challenge those retreading factories that are not in compliance with the rules imposed in the countr y.
Four more factories were closed Riyadh, and another in Zulfi, in
reasoning behind the closures as a lack of commitment to quality standards and specifications of the storage and processing, which threatens consumer safety.
Saudi newspapers carried reports that suggested there was some confusion as to why, in a country that imports 1 million automobiles worth 82 billion Rials, that by contrast there are companies being set up to “rehabilitate” damaged and worn tyres. The law that prescribes a two year life span for a new tyre has driven the market in retreading and has created a lucrative market, yet, according to the authorities, there is no guarantee of quality or performance from the repaired or retreaded tyres. The Ministry of Commerce and Industry carried out a series of visits to retread factories and within the space of two months closed down no less than twelve retread plants in Jeddah, Riyadh and the Eastern region, for violating specifications, including threatening the safety of the consumer. In Jeddah alone four factories shut down and more that 2,500 tyres were confiscated; there are claims that this had a positive impact on traffic accident figures. Among the violations spotted was poor storage, one of the factors that accelerate damage to the tyres, where the tyres openly stored under the sun exposes them to damage and makes them dangerous to the consumer.
The Ministry of Commerce in cooperation with the Saudi
addition to the three plants in the eastern region. The Ministr y of Commerce stated that it was permissible to retread tyres if the tyres are treated to the specified standards. Otherwise the risk of death and injur y from accidents is high, so non-complying businesses will be closed down. Those standards must be maintained and certification renewed every other year.
The estimated quantity of tyres consumed in Saudi Arabia is in the millions due to the magnitude of the market with some one million vehicles being imported each year. While there is a limited market for retreads on commercial vehicles there is an enormous market for retreaded tyres for cars and light trucks: A market often hidden and failing to meet safety standards. The market for these tyres is from an older sector, which prefers not to pay more than 50 Rials per tyre. They save money at the point of purchase but often pay later when they have an accident.
Businessmen saw an opportunity in this low cost market and established operations to retread damaged and worn tyres, but there are many other ways of dealing with used tyres, such as recycling the rubber for walkways and for its use in asphalt, claimed the Saudi press. Saudi law does allow repair and retread to specific standards, Quality Standard 24, in fact. And tyres must be within their original life span in order to be retreaded, or
ABC Borrachas Uses Credit Cards
Brazilian rubber specialist ABC Borrochas in Valedares, is working with Brazilain credit card company BNDES to facilitate payment for its products by credit card. It is asking clients who wish to pay by credit card to contact them to arrange monthly payments.
In today’s climate it shows that businesses have to explore ever y possibility to open doors to sales and perhaps more importantly, get paid for their products.
32 Retreading Business