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RUSSIA
the country’s market. According to Kutolkin, in some particular cases the situation has become paradoxical, when the very fact that tyre can be restored for repeated use becomes a surprise for the management of transport companies.
“They used to take the tyres to the dump as they had no idea about any other ways where they might be used. In addition, most casings available on the market are not fit for any retreading, and there are an
widespread negligence in terms of non-compliance with common rules, regarding such things as pressure tests or inadequate visual inspections. The situation has worsened with the inflow of Chinese tyres, which have the lowest quality conditions and as a result are often not suitable for retreading.
Given these challenges, RK-Reifen is proud that the share of reclaim rates in the company’s business does not exceed 1 per cent, Kutolkin
up to one third of the cost of the new good tyre or half the cost of a Chinese tyre. In such cases the purchaser will tr y to squeeze out
ever ything possible from this tyre,” Kutolkin explains.
The competition environment is rather vague
According to Kutolkin, at the moment there are three other retreaders in Moscow Oblast, including one facility
in the north, one close to RK- Reifen’s plant on the south, and a Michelin Retread plant in Davydkovo. The only facility in the region that was working with OTR tyres sold its retreading line last year and shut down operations. Unfortunately, there are also some manufacturers, who according to the truck drivers, produce extremely poor-quality products, and they in fact bring much more problems for the company, than direct competitors.
To deal with this challenge, RK- Reifen has to heavily invest into reputation maintenance, and it is always willing to make advances to the customers in reclamation cases. “The most common cause of reclamation cases is in-service blowouts, with the reasons for these being often impossible to ascertain. It is often unclear, whether they have happened due to problems with the casings that we have missed, or if it was an operating factor, such as overloading, potholes or obstacles in the road. These incidents are always sensitive in relations with clients, although we are always making advances. Given this, where it possible, we try to minimise such risks by working with the most proven brands, or at least those who have been known the market for more than 3-5 years,” Kutolkin says.
According to RK-Reifen’s estimations, in 2016 Russia’s facilities retreaded 47,000 – 51,000 tyres, but this figure is approximate and does not include the capacities of Volga Tyre Company, Samara or the recently launched Kama Retread.
No place for certain forecasts
In general, there is a market in Russia, so there are prospects, Kutolkin says, adding that there are also several factors, which will determine the future face of Russia’s retreading industry, including the
exchange rate of Russia’s ruble against the dollar and euro, the state’s attitude to cheap Chinese imports and the policy of materials suppliers in Russia.
“After all, it is no secret that the share of tread and raw rubber makes up to 60 per cent of the cost of retreading, and this, in turn, is directly dependent on the situation with currency. This problem is also contributed to by the fact that the only official supplier of good quality retreading materials to Russia is Finland’s Nokian. All other materials are supplied in Russia by retreading plants, which have imported materials for retreading and also further re-sell within Russia,” Kutolkin says. “Marangoni and Bandamatic products are distributed in this way,” he adds. According to RK-Reifen, last year in Russia the demand for retreaded tyres was on the rise, and partly this is associated with the effect of anti- dumping duties against Chinese tyres. Kutolkin also indicates that Chinese manufacturers are targeting to supply Russia with the cheapest tyres only, while better quality Chinese products, including tyres, which are potentially suitable for retreading, are virtually not presented in the countr y.
However, the effect of anti-dumping duties seems to be somewhat limited, as grey importers are finding ways to bring Chinese production to Russia, bypassing the burden of new duties. The way in which authorities will deal with this issue will be one of the crucial issues for the industr y in future, Kutolkin adds.
The retreading equipment consultant
RK-Reifen is one of only a few Russian retreaders, which, in addition to its main specialisation, is also performing consultation services for investors, who are considering establishing their own retreading facility. This primarily involves help with equipment selection.
“Following our analysis of companies on the Russian market offering equipment for retreading, we have decided to visit manufacturers of equipment and ensure their quality and technical support level,” the company’s website says.
“Therefore, based on our own experience in choosing a supplier, and taking into account the many nuances and personal experiences in truck tyre retreading, RK-Reifen is ready to provide services on equipment selection for cold tyre retreading, based on the customer’s requirements,” the company’s website states.
Viktor Kutolkin, Commercial Director of RK-Reifen (left)
enormous number of reasons for this phenomenon,” says Kutolkin. “At the moment, I cannot even share the statistics on what occurs more often: overused tyres or tyres, damaged during operation, but the negative factors in this area are excessive,” he adds.
According to him, these factors include not only the common problems of the tyre industry such as a reduction in the quality of new tyres due to a reduction in the number of cord layers and a thinning of the rubber layer, but also some things peculiar to Russia, such as poor road conditions and inadequate tyre management conditions.
In particular, transport companies tend to use tyres for as long as possible, literally until the metal cords begin to show. There is also
emphasises.
“Our company has a ratio between stock casings and customer casings of around 70/30, but there are examples of successful operations [in Russia] with the reverse ratio, and it depends specifically on the company’s clients. However, there is hope that the share of services will rise among major customers, who once successfully used retreaded tyres. The decrease in the share of low-quality Chinese tyres in the market should contribute to this,” Kutolkin says.
“However, there is another problem, which is specific for our market, as many reputable transport companies prefer to take out tyres with a tread thickness a little above the minimum rate allowable for retreading, and re-sell them for further use, earning on this re-sale
34 Retreading Business