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GERMANY
Marangoni’s Christian Asmuth (Left) and Detlev Biermann of RuLa (Right)
German Retreading Faces a Dilemma
all the big names are there – Marangoni, Matteuzzi, TRM, CIMA all providing the latest technology to augment the traditional equipment, such as the banks of SIO moulds in the hot cure hall.
Seven wagons deliver RuLa retreads throughout Germany, and of course collect casings on return.
Production at RuLa could be as high as 100,000 tyres per year, but has fallen in the past two years to 60,000. Detlev Biermann, the General Manager of RuLa explains, “We can operate at this level of business but we have the capacity to do much more, and indeed we were retreading almost 100,000 tyres per year. The issue is simple. The Chinese are dumping tyres in the market and when people look just at the price they are drawn to buy the cheap new tyre rather than a more expensive retread.
“The drop in sales, for us, has not been so much about the German market but has been more about the drop in exports to Eastern Europe. Here, our difficulty is that we are dependent upon the retailers to sell our tyres. We have no connection to the fleets and we do not have our own retail outlets. So, we need to educate the retailer all the time that the quality of the RuLa retread is a better long term choice for the customer.”
Christian Asmuth from Marangoni added, “Marangoni is planning on making introductions to fleet service operators to try and help
“We are focussing more today on the on/off road tyre where we can reduce costs and build service and quality whilst we hope that the market will recover. Of not, we will have to adapt and be happy with the market size that remains. Biermann continued, “We need to look for help. This is an issue that is hitting retreading hard throughout Europe and we need Europe to act. We need an anti- dumping tax to help level the playing field. For so long as China overproduces and dumps its excess stock in our markets at prices that barely cover the cost of manufacture and transport, then we have an issue. If the Chinese government were to stop subsidising exports of tyres, that might help.
“BIPAVER has presented a paper to the European Union for consideration, it outlines the possible impact on retreading and on European jobs and the environment if there is no duty imposed. We have to hope that this is a step in the right direction.”
“There is also an impact upon the casings market,” adds Biermann, “Dealers are now asking for 15 – 20 Euro to dispose of Chinese casings, these are casings that often cannot be retreaded. It also creates a casings gap, where there are going to be shortages due to so many Chinese tyres with a single life being sold, replacing multi life premium tyres and retreads, thus creating the potential for a casing shortage further down the line.”
The retread sector across Europe, and to some extent on a global scale has been hit heavily by the level of Chinese tyre imports. We have gone into the issue in great depth on pages 18 – 22 of this issue so we will not repeat that comment here.
However, the reality for retreading in Germany is that trade is down, and down considerably by anywhere between 20 and 40 per cent depending upon which retreader you speak with.
However, whilst competing against the Chinese new tyres on a cost basis is virtually impossible, even by moving to cheaper treads and materials from the Far East, there is a contrary characteristic developing in the market.
It is recognised that European treads are amongst the most expensive,
RuLa
Marangoni and Kraiburg do not always come to the fore when one mentions cheap treads. Yet, along with Bandag, Marangoni and Kraiburg premium treads remain popular with retreaders who take pride in their work and who plan on being around. All four of the retreaders we visited for this issue were adamant that they were retaining their customers by using premium treads. Yes, they all agreed that business was down, but at the same time they all told the same story, their regular customers wanted premium retreads, not the cheapest. So, there is still a market, even in these difficult times, for a quality retread, despite the temptation to try the impossible act of competing on price.
RuLa is a modern retread operation based in Königs Wusterhausen about 30km outside Berlin. The company is housed in a modern facility on a new industrial estate that suggests a considerable recent investment in the business.
Everything about RuLa’s appearance suggests a positive business that is looking forward and aiming for greater things. Yet, the over-riding issue facing RuLa was, of course, the impact on the retreading market by Chinese tyres.
To get to this state of the art plant RuLa had built up its retreading operations over many years and had always been open to change. When Berliner Reifenwerk closed
in 2000, RuLa took the opportunity to buy both equipment and the branding from the firm. RuLa also closed a second plant to concentrate all production in one modern facility. Here at Königs Wusterhausen, RuLa produce both hot and cold retreads, but predominantly cold retreads based on, largely, Marangoni materials. The process is familiar to anyone involved in retreading, and the opportunity of developing a new build factory was not missed. The layout is exemplary, with casings arriving to be neatly stored, then moved to drying halls, then inspected, buffed, repaired and built using the latest available technology from the specialists in the market
develop a closer relationship with the end user.”
“We must look at how we can reduce our costs,” says Biermann, “We can invest in salesmen and provide a better service with quality products and tr y to build the interest of the end user.
Biermann has interests in recycling as well as retreading and he is aware that as the number of Chinese tyres increases so too does the environmental impact. Firstly, fewer retreads mean more new tyres coming into the market, which in turn means more tyre
24 Retreading Business