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QATAR & BAHRAIN
Al-Suwaidi to Enter into Tread Rubber Manufacturing
Delmon Looks at Saudi Arabia for Expansion
Despite the slowdown in the market due to low priced tyre imports, increased production costs and almost negligible margins in the Qatar retreading industry, there are still retreaders planning further expansion in order to take the challenge head-on. Al-Suwaidi Tyre Retreading is one such company. “We invested heavily last November, installing a fully automated buffing machine from Akar Makina, a monorail system, a curing chamber and an automated loading system for a 24-tyre autoclave specifically designed for our company,” elaborated Eyad Arwani, Executive
“We couldn’t afford to be negative. We are ready to fight and hope to come out of the current phase after a few months or even years,” he said optimistically.
The company aspires to be a leading retreader in the Gulf countries. “Our idea is to introduce tyre management in the Qatar market to minimise spending on tyres. We are keen to educate the industry that tyres are a long term investment and not simply a commodity,” said Eyad. The company plans to outsource the tyre management system. Al-Suwaidi is keen to project itself as a one- stop shop to maximise the returns.
Mahmood Al Shehabi, Managing Director, Delmon Tyre Factory
Eyad Arwani, Executive Manager, Al-Suwaidi Tyre Retreading.
Manager, Al-Suwaidi Tyre Retreading. Qatar’s largest retreader is now planning to start manufacturing tread rubber at the same plant. Currently, the company imports around 50 tonnes of tread from Midas annually. The significant move would remove the company’s dependence on tread rubber imports in addition to allowing it to supply tread rubber locally to make retreading more viable. “We will start making high quality rubber soon as the equipment is already installed and staff are already being trained. We are talking to premier rubber makers as potential raw material suppliers and once finalised, production will commence,” he explained.
The company retreaded as many as 14,000 tyres in 2012, but production has since slid back to between 7,000 - 8,000 tyres annually.
The company first started retreading in 2003 and consistently grew till 2013, when decline started due to the increased influence of low priced tyre imports. In difficult times, the company has started to focus on quality in order to improve retreading standards and has been installing high-end new equipment.
Whereas some retreading companies are planning to shut down their operations or are using low cost tread rubber to maintain margins, Al-Suwaidi has changed strategy and is focusing on enhancing quality standards and using the best of material in the market. “We are trying to make the best out of the current situation,” Eyad clarified. The company has started repairing OTR tyres with Omni patches and is also using the range of Techking products. It is also working to start a Truck Tyre Centre at the plant, in order to bring more tyres into the retreading operation.
The company is also planning to foray into the recycling business as it wants to use the buffing powder, which is currently disposes of. “We have imported a simple press from China to do something with the buffing powder,” he said.
In response to being asked when the situation would improve, he said, “We may not go back to the 2012 phase anytime soon, but we are trying to evolve as a company that gives quality in a crisis situation,” he said. Al-Suwaidi is a diversified group with interests in property development, food and water bottling as well as retreading.
Bahrain based Delmon Tyre Factory, located in the Salmabad Industrial Area, opened in early 2015, and currently retreads around 350 tyres every month. The retreader feels that it has to focus more on marketing to scale up volumes. “We are planning to form a marketing team to visit various companies and also provide sales and service support. Currently, it is more a one man show and my focus is divided in between the retreading plant and our car sales business,” said Mahmood Al Shehabi, Managing Director, Delmon Tyre Factory.
The retread plant has recently started using Vamshi Rubber from Hyderabad, and offers a basket of Indian tread brands including Midas, Cochin Rubber and United Rubber. Delmon is targeting the 500 tyre mark in the next six months and is planning another plant in neighbouring Saudi Arabia.
The Bahrain plant has one 11-tyre chamber from Treadsdirect and plans to install one more tyre building machine shortly. “We have already one tyre building machine, but once the production rises another one will be required,” he said.
Compare to other Middle Eastern markets, Bahrain is still a fairly good market for retreading. “We retread tyres on average at Bahraini Dinar 36-37 and charge another 10 Dinar for the casing, while Chinese tyres
are priced at between Dinar 70 – 80,” he informed. Pricewise, Bahrain is a good market but its small size is a major growth deterrent as the whole country covers only 270 sq miles.
Meanwhile, Delmon is also planning to transform its retreading plant into a complete one-stop modern tyre centre, offering a tyre shop for retailing tyres and a mobile tyre service. “We are working on the plan and we will need some time to give shape to the project,” he said. Delmon is also into tyre repair, repairing around 10 OTR tyres in a month. “We are using the Monaflex system for OTR repairs, and in the next three months we will be expanding our portfolio to JCBs etc,” said Shehabi.
The retreader feels that the low Chinese tyre prices are mainly due to the all time low prices of oil. Currently, oil prices are hovering around US$ 40 per barrel and if prices move up, tyre prices will also increase. “When petroleum prices were around US$ 100 per barrel around couple of years ago, Chinese tyres were also priced at Dinar 120 but now they have come down to Dinar 80 on average in the Bahrain market,” Mehmood said. Before the oil prices came down, retreading charges were around Dinar 50 but now the prices are down to 36-37 Dinar.
38 Retreading Business
Bahrain Tyres Factory Phasing Out Old Machinery
Bahrain Tyres Factory, one of the oldest retread units in the country’s capital, Manama, is replacing its older equipment with new machinery. Despite a slowdown in business, the company is planning to replace its chamber, which has been running for
the last 15 years. “We have placed orders for a new buffer, while the tyre chamber will be the next to be changed,” said Nanda Kumar, Production Manager, Bahrain Tyres Factory.
The factory started back in 1959 with