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LATVIA
to the truck. This happens because some Latvian retreaders are putting on the tread strip manually and as a result, especially with big sizes, the tread pattern is becoming crooked, so when in contact with the ground it brings problems to the driver with the instability of the truck in general,” he added.
Marathon probably has not such a level of automation of the production process as Laneks, but still claims to have the strictest system of quality control among all Latvian companies.
“Each tyre at our facility has its own passport, where we can track who worked on that day, and most market participants can confirm that tyres retreaded in Marathon, in general, have a positive feedback. We do not have to write stories in newspapers and spend money on advertisements, since the best possible advertisement for us is when one driver tells another that he purchased a tyre at Marathon and it ran for over 200,000 kilometres,” Ciscakovs stated.
“We are passing special tests annually as we have a contract with a German company from Dresden, so their representatives regularly come to our facility checking our papers and choosing some particular tyres from our production facility, taking them to Germany and testing them. If everything is OK, they give us a certificate of quality. This is the thing that leaves us without sleep at night, as we are preparing for such inspections, measuring temperatures in autoclaves and checking all stages of the production process,” he added. Quality sometimes even turns to become a problem for retreaders, since focusing on the premium products, they are sometimes unable to offer lower prices to customers. For example, Guccic explains that Laneks is primarily working with premium quality Kraiburg tread, while some clients are coming to the facility, requesting the cheapest possible production.
Ciscakovs also says that Marathon cannot be considered as a supplier of cheap retreaded tyres. According to him, the basic cost of his production is nearly a third lower compared to new tyres, while, in general, Marathon is not moving up beyond a price of EUR 170 per tyre.
Another very important factor for both companies is staff. With every possible option Latvian retreaders
are trying to now avoid the dismissal of employees, since in the future it would be absolutely impossible to find any replacement.
“Obviously, when there is no work I let my workers go home because there is no point in them sitting here for the full day, while if we get orders and clients I call them, so they may get to the facility to do the work, but if everyone were dismissed and the market were to start recovering someday, we simply would not be able to find qualified people. Even if we got them, once again we will have to teach everyone personally on how to work our equipment,” Guccic claimed.
“From the point of view of human resources our position here is quite simple. There are no institutes, where people can get the skills necessary for this profession. We have people who have been working here for more than 10 years. Most of them came to the facility with the knowledge that tyre is round and there are small and big tyres. In our factory. if you stand on a conveyor belt at one position you have one salary, but if you master a second position your wage becomes higher, and we already have three people who work on the assembly line performing absolutely all functions, starting with inspection and ending with the autoclave,” said Ciscakovs.
The other important point of quality is casings. Representatives of both companies say they are not purchasing casings from the Latvian market, since local drivers have a bad attitude to tyre use, so most casings turn out to be not appropriate for retreading. Laneks purchases casings from Netherlands and Germany, while Marathon buying them from Norway and Japan.
“We previously had been purchasing casings from Germany, but at some point local companies started to conduct retreading themselves using all A-class casings, in other words the best casings. As a result, we were no longer satisfied with the quality of products local firms were offering us, so we reduced the volume of orders. In addition, we cut the volume of purchases from Japan after the Fukushima incident. I think Japan does not conduct much tyre retreading, but they also do not have a lot of the sizes we are using,” Ciscakovs said.
He also added that good quality should be coupled with the right
strategy of cooperation with clients, and this area is also influenced by the negative state of the country’s market. In order to not lose customers Latvian retreaders, in case of problems with retreaded tyres, have to take the blame upon themselves and bear some additional costs in order to keep clients.
In general, market participants believe the situation is tough, and
in fact the only good thing they point out is that the perfect storm has already taken place, so with all negative factors already affecting the industry, the situation probably could not become worse. Remember, the proverb that the night is darkest just before dawn, they say. Latvian retreaders have some small piece of hope that the dawn is really coming.
Juva Expands Despite Difficult Market Conditions
Despite a sharp fall in demand for retreaded tyres across Latvia, one of the largest market participants in the region, Juva, seems to be swimming against the tide, as it has recently heavily invested in the modernisation of its equipment and has nearly doubled production capacity. In the opinion of company vice-president Ivans Kucins, the improvement of efficiency should be considered as the best tool in struggling against harsh market conditions.
“We have been operating since 1992 and have purchased
equipment on two occasions, both with the support of European funds. Last year with the participations of these funds we have bought and installed a new manufacturing line,” he said, adding that as a result of re- equipping his facility, the factory could, at the moment, could be safely named one of the most modern retread plants in the Baltic States, and probably one of the most modern in Eastern Europe. According to him, although the company has previously has been working with numerous partners,
Juva’s Ivans Kucins
42 Retreading Business