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UAE/OMAN
Universal to Enter Moulded Auto Rubber Parts Business
Universal Tyres & Retreading Systems LLC is planning to foray into the automobile parts business shortly. The move is to counter the slowdown in the retreading market of the UAE. Currently, the UAE market is crowded with around 24 to 25 retreading companies operating in the seven Emirates, creating intense competition for every tyre sale. “Retreaders are cutting prices to retain customers and offering long credits with absolutely no one knowing when the money will come back from the market,” said Anil Kumar Shetty, Manager, Universal Tyres & Retreading Systems LLC.
To retain and consolidate its hold over its long term customers, the company stepped into the new tyre business about a year ago. “We have started selling new Chinese and Japanese tyre brands like Odyking from China and Firestone from Japan,” he informed.
To further expand into the automobile business, the company now plans to manufacture
moulded rubber parts for the automobile industry. “We will produce auto parts like bushes, washers, O-rings etc by the end of 2015,” Shetty informed. Universal will install a line for the auto parts at the retreading plant itself.
The company has already finalised an investment of Dirham 1.5 to 2 million for its move into the auto parts sector. “We will be supply moulded parts to the UAE and Gulf Cooperation Council (GCC) countries market,” said Vikas Malkani of Universal Tyres. Universal is one of the largest retreaders in the UAE market, but its Dubai plant is currently operating at half of its installed capacity. “We have the capacity to retread 150 tyres per day, but are only producing around 70 tyres today,” he said.
The low priced imported tyres from China have heavily affected the sales of existing retreaders. “We all are waiting for the time when the Chinese government removes the subsidies and the prices of tyres firm up,” Malkani
added.
The retreaders feel they are in a strange position as they think themselves not to be in a position to approach the government to stop the entry of Chinese tyres for fear of being seen as hypocritical. “The whole retreading industry is dependent on imported Indian tread rubber, therefore, how can we approach the authorities to check the entry of new tyres from China, when we are also using
imported rubber,” Shetty commented. Universal buys tread rubber in a number of brands to serve high to mid to low price segments. It imports tread brands like Leader, Max, Midas, Bremels and Tolins.
brands to serve high to mid to low price segments. It imports tread brands like Leader, Max, Midas, Bremels and Tolins.
Anil Kumar Shetty (right) along with Vikas Malkani Universal Tyres & Retreading Systems LLC