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companies have assessed the risks of today’s market environment and have ultimately decided to place these plans on hold. As a result, small companies are simply afraid for the security of their money, while large businesses in Russia have no interest in retreading for different reasons.
“We believe that there were possibilities for large financial groups to establish such projects, while banks also can put their money into relevant initiatives. We were even discussing some particular projects with some of them. For the most part such big businesses have no reason to worry about the questionable actions of the authorities, since they usually have some
connections and have some lobbying tools. However, during negotiations with them it turned out that they are not interested in such projects due to the low level of return,” Ilya Chepyrev added. He explained that, in general, the major financial groups in Russia were looking to invest their money into projects that offer a level of return within 1-2 years, and with a strong potential of future growth. At the same time, today’s retreading industry in Russia remains the type of business with unclear prospects, low level of interest of investors and a relatively long period of payback even under perfect management.
company’s sales department Andrei Sergeev, production of rubber compounds for retreading was stopped in May 2015. Previously, product had been in demand from a number of mining companies which had been conducting the retreading of tyres for haul trucks and other equipment.
“We have one major customer, Quarts Ltd, which had been purchasing 10-20 tonnes of rubber monthly. However, from the middle of last year they stopped purchasing this product and have started manufacturing it at their own facility,” explained Sergeev.
“Most likely it happened as part of a strategy for the diversification of business and a decrease of operational spending, as a large number of companies in the current economic environment are opting for similar solutions,” he added. Company Director Leonid Pasich explained that the Yaroslavl RTI plant had previously been producing broad range of rubber products for retreading industry including cushion gum, tread rubber and sidewall rubber. “This is still potentially an
interesting topic, but it is not our main area of interest, partly because of our geographical location, as, according to our information, it is more interesting for manufacturers of rubber in the regions where retreading is more developed due to the large number of truck tyres,” he added.
As things stand, the Yaroslavl RTI plant is ready to re-launch the manufacture of rubber compounds for retreading in the event that there would be any new major customers. Pasich says in the Yaroslavl area there is clear trend towards rising investment in retreading, so he is sure that this direction will become more interesting for the plant in the future.
“We see that still [in our part of the country] companies are expressing a rising interest in retreading, as several years ago the exchange rate of the Russian ruble allowed producers to purchase new tyres and simply throw away used ones. However, today business is opting for new economic solutions,” he stated.
Yaroslavl RTI Plant Ceases Retread Compound Production
The Yaroslavl RTI plant has ceased manufacturing raw materials for the retreading industry due to the weak market demand, as over recent years the plant has lost all its major
customers in this segment. This was revealed during an interview with the company’s management during the Moscow Tyre and Rubber Expo.
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