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that haven’t, plenty where markets are opening up again and plenty where other political considerations are threatening the market.
Turkey, for example, is currently deciding whether to rescind its anti- dumping regulation against Chinese tyres. For markets like Malaysia the issue is tied up with the country’s status as an exporter of rubber, whilst in South American countries like Chile and Uruguay the market is being impacted by a national policy of openness.
Which brings me neatly onto Europe, where the key issue is the EU’s traditional stance in favour of free trade. Here the attitude to the tyre retreading sector is best
Retreaders Associations, BIPAVER was so frustrated with the Commissioner’s lack of understanding of the make-up of the European retread sector, and the refusal to initiate anti-dumping legislation against the Chinese tyre industry that it sent out a strongly worded press release accusing the EU of being unable to defend SME’s. The press release read as follows; “After more than a year asking the Directorate-General Trade to consider our case and presenting several solutions, both technical and legislative, it has become clear that the European Commission is not able to defend our industry due to the lack of legislation for this specific
understand the added value of a European trade policy if they are not able to defend their own SME industries.”
A closer understanding of where interests really lie can be seen in the wrangling over the future of the UK steel industry and, in particular, a story which broke in April relating to the potential closure of the Tata Steel owned Port Talbot Steelworks in South Wales, which was said to be losing £1 million per day.
For those of you who are unfamiliar with this story, the main reason given for the uncompetitiveness of the Port Talbot plant was the dumping of cheap steel from China into the European market. True to its
ultra-free market approach, the EU had managed to impose penalties of only 13% on Chinese cold rolled steel compared to a whopping 267% by the US government in Washington.
At the time there were plenty of voices suggesting that there was more to the UK government’s failure to act than met the eye. Stephen Kinnock, the MP for Aberavon, where the Port Talbot plant is located, said in a newspaper article “We are rolling out the red carpet for Beijing”, suggesting that Britain was pushing for China to get market economy status at the World Trade Organisation despite the fact that the
vast majority of its steel industry was state-owned. He also described Britain as a “ringleader” in blocking European commission attempts to improve anti-dumping policies. “They are in hock to China,” he said. “Our commercial policy, our
approach to trade and manufacturing, and our overall industrial strategy, is being dictated by Beijing.”
In another article a Brussels official was quoted as saying; "The British are sacrificing an entire European industry to say thank you to China for signing up to the nuclear power project at Hinkley Point, and pretending it is about free trade."
I am digressing, of course, but the point of this digression is to show that there are higher level issues at play than the saving of small SME industries. If the stakes are so high in other areas that governments are prepared
to risk the future of an industry as fundamental as the steel industry, then what chance does a small industry like the tyre retreading industry have?
Clearly the retreading industry cannot rely on governments to support its interests, so I’m afraid the industry just has to get on with it, and focus on looking after itself. The current situation in Europe is as follows: According to ETRMA figures, the total European truck and bus tyre replacement market has recovered somewhat since 2012 when it fell to a low of 9.6 million units. In 2014 the market was back to nearly 12.2 million units – on a par with the average market size of 10 years ago. Overall, the trend is more or less even except for the blips experienced in 2008-9 and in 2012. Over the course of the past ten years, however, the make-up of the market has changed fundamentally. ETRMA manufactured tyres have fallen from 8.5 million in 2003 to 6.5 million in 2014. This accounts for a reduction in ETRMA market share from 73% to 54% over the period. And whereas the overall market has recovered since 2012, ETRMA sales have not recovered in the way they did after the 2008-9 crisis. The recovery has come almost entirely from imports, largely, of course from China.
The make-up of imported tyres has changed significantly since 2007, when there was also a very high number of truck tyres imported into Europe – 6.13 million units, in fact – more than the 5.8 million imported in 2014. However, the origin of these tyres in 2007 was split fairly evenly with 1.3 million units coming from Japan and only 1.5 million from China. By 2014, of the 5.8 million tyres imported, 3.5 million were from China, and since 2012 the amount of new truck tyres coming into Europe from China has increased by 50% each year. Meanwhile, whilst the new tyre replacement market has more or less held its own, truck retread sales have plummeted. According to ETRMA the market has reduced from 5.8 million units in 2007 to 4.7 million in 2014. The market did see a temporary recovery in 2010-11, but overall, the retread market is moving in only one direction. Many foresee a further consolidation in the European retreading industry and a new restructuring of the market. If that happens, what kind of a retreading industry can we expect to see in Europe, and what can individual retreaders do to make sure they are the ones who survive the shake out?
In my opinion, one of the key problems that has affected the retreading industry over the years, is a kind of laissez faire attitude and a widespread unwillingness to really invest in pushing the industry’s
Source: ETRMA
illustrated by the words of EU Commissioner Cecilia Malmstrøm, who says her first responsibilities are “Pursuing an ambitious trade agenda to the benefit of European citizens, SMEs and the broader economy.” However, the European Federation of
situation within the retread industry. At a time when the EU is discussing opening even further the EU market to imports from diverse exporting countries and when its citizens are questioning the European project, the retreading industry cannot
Source: ETRMA
18 Retreading Business
