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KENYA
Indian Tread Rubber and
Machinery Brands Dominate
“The plant caters to the markets of Kenya and the neighbouring countries of Uganda and Tanzania, manufacturing around 35 tonnes of tread rubber and bonding gum each month,” informed Saroj Kumar Nahak, Manager Operations, Treadsdirect Kenya Ltd.
Kumar, who joined the Kenya plant in the second half of 2014, commented on the challenges currently faced by tread makers in the African market. “In earlier times the competition was largely from imported tread rubber brands mainly from India and Malaysia, but
he argued. “In addition two of our major clients, Universal in Nairobi and Kenket in Nairobi and Mombasa, shut down their operations in the last couple of years, and this has also had a major effect,” he added.
Despite the challenges, Treadsdirect, which has by now reverted to the older title of Elgi Rubber Company Ltd, still retains its influence in the market thanks to its strength with a number of dedicated retreading operations. “We have around 10 regular clients in Kenya, one in Tanzania and two in Uganda as well
Kenyan Market
The Kenyan retread market has traditionally been controlled by the Indians residing in Kenya as well as by Indian tread brands, with Elgi tread rubber subsidiary Treadsdirect Kenya operating a fully-fledged tread making production facility in the capital Nairobi.
Indians have deep roots in Kenya. Their migration began with the construction of the Ugandan railway between 1896 and 1901 when some 32,000 indentured labourers were recruited from British India. Once the railway was completed, many of these labourers voluntarily settled in what was then the East Africa Protectorate and brought family from India.
The early Asian settlers were predominantly from the Indian provinces of Gujarat and the
Punjab and quickly embraced the opportunities available in the new British territory. The railway opened the interior to trade, and many soon began migrating away from the coastal cities. Most settled in the new towns of Nairobi and Mombasa.
Kenya, with a major port in Mombasa, is a lifeline for landlocked neighbours like South Sudan, Ethiopia and DRC. The trucks laden with supplies are passing through Kenyan towns and cities, stopping for fuel, tyres and components.
Initially, Indian tread and equipment manufacturers like Elgi monopolised the Kenya market as the link between Indian factories and brands was natural, but later on other Indian tread rubber brands Midas, Indag, Bremels, Tolins etc sensed an opportunity and entered Kenya too.
Although Elgi may have lost some ground on the tread side, it is still a preferred machiner y supplier in the region with clientele spread throughout the whole of Africa, although smaller equipment suppliers from Coimbatore like Rajmahal, Gemeni, Glisten etc. have also emerged on the scene.
One of the new entrants from Malaysia is Sun Rubber, which has converted several units in Kenya in the last couple of years. Of the other Malaysian suppliers, Eversafe has been the longest in the market. However, the Goodway brand Supercool has also gained ground recently and seems to be growing consistently.
Though Malaysian brands are increasing their presence and posing challenges to the Indian tread rubber brands, the Indians still hold ground due to their connection with local manufacturers.
Retreading was doing fine until the entr y of low priced new tyre imports from China. Initially Chinese tyres were high priced but later dropped to half of the international brands, wiping their market overnight. The dropping of tyre prices by Chinese tyre companies also affected the retreading industr y leading to a price war among retreaders, the introduction of long credit terms to hold clients, the entr y of cheaper tread brands and the closure of several retreading units.
Among the major closures was that of the Universal plant in Nairobi, opened by the Dubai based Universal Tyres & Retreading Systems LLC. It was followed by the shutting down of several other plants.
The entr y of Chinese tyre brands has also led to consolidation among the retreading companies. Retreaders with plants at multiple locations are preferring to focus on their home ground and are selling off their plants in other states. Despite this setback, the retreading industry keeps moving and some of the retreaders have ambitious plans to open new plants in newer locations. Kisumu and Kakamega in Western Kenya are emerging as hot destinations in the future as several key retreading companies have revealed plans to set-up retreading units in the two cities.
during the last three years, the import of low price tyres has adversely affected the retreading industry. Now fleet owners prefer new low price tyres over branded tyres good for multiple retreading.” The Indian tread rubber brand has experienced falling tread rubber sales in the last couple of years as Chinese tyre makers improve the quality of their tyres. “Imported tyres are now lower in price and becoming more retreadable. Because of this, retreading companies have started importing cheaper rubber compared to our brand to control their cost of production and prices,”
as a number of other occasional clients,” said Kumar.
Meanwhile, the company has recently launched outside envelope in the local market. “We introduced the ‘Ultra’ series of outside envelope in the Kenyan market at the beginning of this year and have so far received positive response,” he said. The Indian brand continues to make efforts in increasing sales of envelopes, repair units and other accessories in the Kenyan, Tanzanian and Ugandan markets besides tread rubber and bonding gum.
Saroj Kumar Nahak, Manager Operations, Treadsdirect Kenya Ltd.
Treadsdirect Holding Ground in Kenyan Market
Singh Retread Ltd plans to relocate to a new location in the next three years as the company’s existing plant has no room for further expansion. “We will start plant construction by the end of next year and hope to shift from the existing rented premises to our own plant by the end of 2018 or the beginning of 2019,” said Harchand Singh, Managing Director, Singh Retreads Ltd. Half of the existing machinery
would be shifted to the new plant, while the remainder will be replaced with the new equipment.
The depressed state of the truck tyre retreading market in Kenya had led Singh Retread to introduce OTR retreads much earlier than originally planned. The company is among the first firms to bring OTR retreads to the Kenyan market, and it continues to add OTR moulds, having recently installed seven more presses. “We
Treadsdirect Kenya is trying to consolidate its market share in the Kenyan retreading market. Operating a manufacturing plant in the capital Nairobi, Treadsdirect is holding its own despite rising
competition from competing tread brands from India and Malaysia. The company has operated a tread making plant producing a number of fast moving tread patterns for more than two decades.
50 Retreading Business
Singh Retread Looks to Relocate by 2018