Page 50 - RB-69-14-2

CHINA
Jianxin Building US$ 500 Million Truck/Bus Tyre Plant in Fujian - Looking to Expand Tread Rubber Exports
With the Chinese retreading market shrinking and no immediate signs of improvement, China’s largest tread rubber maker Jianxin is looking for growth opportunities out of its own domestic market.
in the domestic market with the ‘Matread’ brand. Its J105 pattern for all steel and bias tyres for light duty truck and city buses is very popular in the Turkish market, which is one of its main markets in
European markets of Russia, Ukraine, Romania, Belarus etc.” It is also open to working with agents in these markets.
Jianxin imports around 1,000 tonnes of rubber from Thailand and Vietnam every month to feed its large production requirements. It also manufactures bicycle and motorcycle inner tubes. Commenting on the grim local market scenario on the retreading side, Brave stated, “The government has banned retread tyres on long distance bus fleets and that is the biggest blow to the industry in the recent past. On the one hand labour costs have risen by almost 30 per cent in the last three years and on the other the price difference between new and retreaded tyres has further reduced due to overcapacity in manufacturing.” New tyres are
capacity annually. “We are investing US$ 500 million to manufacture bus/ truck tyres from May 2014,” Brave said. “We will focus on quality as the upcoming plant will have the best of equipment imported from abroad to enable us to give good tyres to the domestic and export market, which can be retreaded.” As per independent estimates, merely 10 per cent of tyres are retreaded in China and approximately 70,000 casings are retreaded in Fujian Province every month.
The tread producer, soon to be tyre maker, believes that it may not be a Herculean task to build a network for its tyre distribution. Jianxin would use the platform of its vast retread network throughout China to market its tyres. “We are supplying tread rubber to 3,000 retreading factories around China
Brave Cai of Jianxin Rubber (Fujian) Co Ltd
Jinjiang based tread maker Jianxin Rubber (Fujian) Co Ltd has the capacity to produce between 4,000 – 5,000 tonnes of tread per month, but due to the downturn in the domestic retreading market, it only produces around 3,000 tonnes. Jianxin’s export division is headed by Brave Cai, who has redrawn the company’s growth strategy to consolidate its leadership position and embarked on expanding its export market. “We started making tread in 1989 but export only started in 2011. Our exports are now growing at the rate of 5 -10 per cent annually and our coverage has grown to more than 40 countries,” stated Brave. Currently, Jianxin exports around 20 per cent of total production.
Jianxin exports tread under the brand name ‘R-Stone’ and operates
Europe. Some of the company’s other tread patterns doing well in the European markets are the J207 for steel and bias tyres for heavy duty vehicles on mixed road conditions while patterns like the J208, J212 & J217 are for cement mixers and speciality vehicles. Jianxin’s J16 pattern is much sought after in the domestic market as it has applications in light duty truck, city bus, small bus, vans and sanitation trucks.
On running the plant to the full capacity, Brave commented, “We hope to achieve capacity utilisation in the next five years depending on the situation in the domestic market.” In response to the new overseas market Jianxin intends to explore in 2014, Brave replied, “We hope to open markets in the US this year besides the Eastern
available on average at US$ 160 compared to retreaded tyres at around US$ 150, therefore, market conditions are tilted in favour of new tyres.
With the retreading industry marred by its inherent contradictions due to casing shortages, closure of retreading plants and the market flooded with cheap tyre brands, Jianxin is looking for growth opportunities in the core rubber sector. As part of the growth strategy, the company has finally taken the plunge into tyre manufacturing also. “It is a logical expansion in the rubber business with the tread market continuing to be limited in the last few years,” feels Brave.
Jianxin is building an all new tyre production facility in Fujian Province with 1.2 million tyre
and many of them are not doing well due to bad conditions in the retreading industry. They could sell our tyres and even retread them if the customer brings them back to us. Therefore, it would be a support to their operation and provide service to the industry,” he explained.
Jianxin Rubber (Fujian) Co Ltd is located in Jinjiang with fixed assets of around 150 million RMB and its production facility spreads over an area of 80,000 square metres. It manufactures a range of products including precured tread rubber, cushion gum, curing tube and flaps etc.
50 Retreading Business