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THE EMIRATES
because the country remains peaceful whereas Egypt, which is also a big and potentially lucrative market, continues to be in turmoil after the Arab Spring movement. Nonetheless, some retreaders are still eyeing the Egyptian market and ready to take the plunge once the situation has stabilised. Extramile too have plans to enter the Egyptian market once political conditions allow. “We are waiting for the time when Egypt normalises and have plans to build a factory in either Alexandria or Cairo. We may enter Egypt in the middle of 2014,” said Mohammed Mahmood, General Manager, Extramile Renew Tyres Factory. Extramile thinks that Egypt has the potential to grow as a big market in future. “But the current situation in that country remains a cause of concern. We are waiting for the right moment and as soon as the things becomes normal, we will enter that market,” confided Mohammed. Currently, Extramile is based in Ajman, the smallest of the seven United Arab Emirates and it has experienced massive development and a construction boom in recent years. Interestingly, it the company has also tried to enter the Iranian market but it has not worked. “We have tried to get into the Iran market but it has not worked well as finding suitable casings is a major issue in Iran,” Mohammed said.
Extramile started in 2007 in Ajman and retreads around 24 tyres in a day. It sources tread rubber from Indian brands Eastern Tread or Narmada and orders around one and a half containers every second month. Commenting on the ongoing market conditions in the UAE, he said, “UAE is a good market but smaller players have considerably increased competition by offering retreads at very low prices. We believe that a good price for retreading a tyre on an average is AED 500 – 600 but small retread shops readily retread at AED 300 and this really breaks the market for us.”
Moreover, the availability of countless Chinese tyre brands has also made the going tough for retreaders. “Now, new
Chinese tyres are available at AED 700 to 1,200, whereas, tyres are retreaded at AED 300 – 500. Smaller fleet owners tend to prefer new tyres to a retreaded casing,” said a concerned Mohammed.
Extramile also banks on the renewed market sentiments in respect of Expo 2020. “The UAE government has created lot of hype over Expo 2020 and once the infrastructural projects for the Expo starts, we hope that things will turn in the right direction for the UAE market,” he commented.
Mohammed Mahmood, General Manager, Extramile Renew Tyres Factory