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LATVIA
Juva’s workforce justifiably proud of their Kraiburg retreads
at the moment it cooperates primarily with Kraiburg.
“We are pleased to say that this year our turnover in retreading segment is nearly 50 per cent above last year’s rate, not only due to the launching of the new production line, but also due to more active work with our clients,” Kucins suggested.
Falling market
However, the company’s expansion has taken place against the backdrop of very tough market conditions in the European market in general, and in Latvia in particular. Rising competition with cheap Chinese tyres has negatively affected the demand for retreaded tyres, which has been constantly falling for nearly three years in a row, as large number of truck owners switch to the purchase of Chinese production.
“We [all retreaders in Latvia] have a common problem with the fight against Chinese tyres. Despite this fact, we are ourselves also representing some Chinese tyres at the local Latvian market. They are not the cheapest, but with good quality they help us in our retreading business activity, since they have good casings,” Kucins argued.
Since the start of the Chinese invasion in Europe most market participants in Latvia have had to add the distribution of Chinese tyres to their operational portfolio, and in this issue Juva is no exception. However, the retreading segment remains the strongest driver of growth for the company’s profitability.
“We are keeping the rate of sales of truck tyres at the level of last year, while in the segment of retreading we have serious growth. This is overall growth, also taking into account export supplies,” Kucins stated.
Export also plays an important role
in the company’s operation, even though in recent years in this segment the company has had to face some difficulties.
Export hopes
As explained by Dmitry Lukjanov, head of Juva’s tyre retreading department, the company saw some impact from the trade conflict between Russia and the European Union and related sanctions, since currently the company has only single contracts with Russian customers, while previously the potential for cooperation was much higher.
“They [Russian transport companies] have really express some interest, but it is hard to make orders, because from the time you sign the papers to the point where you actually need to make a payment, there could be strong jumps in the value of the Russian ruble, so as a result it is hard to
make business,” he indicated, also adding that, in general, such orders could be associated with numerous risks of a different nature, so Russians, so far, are refraining from them.
At the same time, in general, according to Lukjanov, the export division of Juva has a strong seasonality, as during the first half of the year for sales are primarily falling in the Latvian market, while starting August-September it experiences a rise in demand for retreads, from foreign customers as well.
“Export to Scandinavian countries generally rises close to the cold period, when they start to face the demand for winter tyres,” Kucins stated, adding that in total for the year export accounts for about 25
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