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POLAND
The plant served the transport sector that was predominantly, in turn, servicing the agricultural industry. The region is Europe’s largest producer of apples and the biggest export markets for apples were the neighbouring states of Russia and Ukraine. The former is now subject to a trade embargo and the latter’s
lack of knowledge and skills both at the fleet level and in the sales level. We need to educate everyone in the chain. Some people may know about this but if you have never approached the market in this way previously it is all a new world to learn about. It is not easy to change the salesman’s ideas to offer the
larger player. You need to motivate the salesmen to become fleet specialists. We want to show them that it can work. They need to understand why we are doing what we are doing. When the salesmen and the fleet operators understand what we are doing we get better co- operation.”
Is there any issue obtaining suitable casings?
“Up to 2014” said Czarnecki, “we imported about 50 per cent of our casings from Germany and the Netherlands. However, now we are using Polish casing suppliers, and customers’ own casings. Tyre dealers and fleets bring us their own casings for retreading. The use of shearography has increased the quality of our casing inspection and also the quality of our end product. Of course, we prefer to retread customers’ own casings because they know the history of the casing and they tend to look after them better.”
Has the casing supply seen any changes due to improvements in the road network in recent years?
“Well, the regional casings are slightly better but off the main roads conditions can still be harsh and that can impact upon the tyres. Long haul tyres are usually better for retreading. But overall the same issues remain, overloading, which is not as bad as it was, and under pressurising the tyres.These do still impact upon retreadability.
retreads only account for 24 per cent, so there is a lot of room for improvement in the market.
“One of the challenges for retreaders in Poland is price, there is not so much room for profit. A retread in Germany will cost about 170 Euro, in Poland it will be 140 Euro plus the casing cost. However, there are some retreaders offering truck tyre retreads at around 125 Euro including casing and that has an adverse impact upon the market.” One can only imagine how a retreader can sell a retread at 125 euro including casing and what that practice can do to the reputation of the end product.
When we talk to German retreaders they talk or export to Eastern Europe and, previously, to Russia. Is there room for Domar to export? “We used to export a little,” said Czarnecki, “but nowadays we sell to people who may then export themselves. We do not currently export direct, it is a question of currency. As an example, we tried to sell to Belarus for a year but their currency was not holding its value and they could not afford to pay in Euro, and the casing exchange was not working in our favour. We also sold a few tyres to the Ukraine, but only in small quantities and today no-one will accept Ukrainian currency”
These challenges of the trade embargo and the lack of exports to your near neighbours must have
Wieslaw Czarnecki Right, with the editor, Ewan Scott
currency has no value, so since the difficulty in the east of Ukraine began, that agricultural trade has taken a blow. If the farmers don’t sell their produce, then no-one further down the chain gets paid.
In this region, according to Czarnecki, it is difficult to diversify so it is important to cut costs to suit the market. Domar does sell throughout Poland and has two sales agents who visit clients, one covering the East the other the West. However, between the economic crisis and the Ukrainian crisis orders have reduced by 40-50 per cent in recent years.
Asked how this drop was being addressed, Czarnecki replied, “Last year we started to address the end users directly. In the past we sold only to the retailers and wholesalers, but now we are going to the fleet operators and selling direct. However, demand is lower and the competition from Chinese tyres is high.
People have cash flow issues and right now the main consideration when buying tyres is the cost to them right now, at the point of purchase. The clients are constantly checking prices, comparing prices and it is a real challenge to sell in this kind of market.
“The issues are not just those though. There is a lack of understanding and there is a need to specialise. The problem then is the
right solution. We need to train them to switch from selling tyres to selling solutions.
“Our market is not yet serviced by tyre management solutions, the market is not so sophisticated at the moment. We need to present the
real value of the retreaded tyre and show by comparing with new tyres that this is the best solution. We need to convert the operators to think in terms of cost per kilometre rather than the initial outlay per tyre. “So, our salesmen visit the operators and listen to their needs then offer the products that offer solutions and show the benefits of the performance of our retreads.”
Domar sells throughout Poland but there needs to be some direction in sales. How do you manage the sales effort?
“We try to operate locally where we can, but we do take sales to the
West of Poland. We go to fleets who are new to retreads, we look for opportunities. So, if there is a new construction site, we will visit direct to the site and try and get through to the people buying tyres for that particular job. We are building contacts. The quality of the sales managers is important. It is easy to give someone a job and say, go and sell. However, we are tr ying to encourage people to train to do more.
“If you have a small company you cannot expect the same results as a
“One of the issues that we have in the Polish market is that the larger part of the market consists of second brands, and the reality is that any tyre manufacturer’s second brand is not manufactured to the same standard as their premium brand, but the users don’t worry about that. The consequence is that the second brand tyres tend to take less punishment and they sustain more damage. On the replacement market these second brands can account for 75 per cent of the market and
impacted on production. What sort of output do you have today compared to the past?
Czarnecki responds with resignation, “Four years ago we were turning out 15,000 tyres per year, that has been reduced today to 7,500. Demand has been fluctuating, September and October last year were good, but with the mild winter November and December were poor. Januar y 2015 , so far, has been positive, perhaps the best month in quite some time.
“We have, in fact, been sending
28 Retreading Business