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SRI LANKA
1.2 Million Tyres are Retreaded in Sri Lanka Annually
generation is more keen to seek white collar jobs.
Richard Pieris Tyre Company Ltd controls a majority 55 per cent of the Sri Lankan retread sector, while AMW, 3K Holdings and Autoways are the other key players present in the market. On the equipment side, the market is controlled largely by the Indian machinery and Coimbatore based Rajmahal. Interestingly, most of the major players in the market are not dependent on tread rubber supplies from India and are self- reliant, having built their own manufacturing capacities to get unhindered supplies to run their large retreading operations with multiple plants. Indian tread
producers like Elgi Rubber and MRF have their own plants in Sri Lanka to feed the local market. “The Sri Lankan retread market has by and large been stable in the last five years,” commented Roshan Fernando, Manager (Operations), Elgi Rubber Company Limited.
Currently, about 50 retreading plants are based in Sri Lanka and more than 15 of these were visited for writing this feature on the Sri Lankan retreading industry. Our correspondent Satnam Singh traveled around 1,200 km by road covering retreading plants in the key cities of Colombo, Anuradhapura, Vavuniya, Jaffna and Kandy.
The Sri Lankan retread tyre market was estimated to be worth 120,000 tyres per month a few years back but it has shrunk and come down to 90,000 to 100,000 units due to the presence of low-priced imported Chinese tyres. Considering the size of the country, it has a respectable annual retread volume of around 1.2 million tyres.
India is one of Sri Lanka’s biggest investors and trading partners, but the de-monetisation of high value currency notes in India last November impacted the local economy significantly.
annually,” said Pradeep Samarathunga, CEO, Richard Pieris Tyre Company Ltd. It has also been observed that key infrastructural projects have been put on hold for the time being due to fund liquidity. Owing to the slowdown in the
market, retread companies are also in consolidation mode and focusing more on maintaining their share in the market at the moment.
However, this does not mean that retreaders have no plans to grow in the future. Most of the companies visited are keen on shifting to bigger locations for expansion, focusing on increasing efficiencies by introducing greater automation and even looking to expand beyond borders on the tread rubber export side.
The expansion, however, is on hold, as retreaders are waiting for
SGR to Focus
on Capacity Utilisation
Ganga Ekanayaka with Shyamal De Silva, Marketing Manager, S.G.R. Precured (PVT) LTD
Colombo - Capital of Sri Lanka
“Despite the civil war going on in the Northern Province for the last 25 years, the Sri Lankan economy has continued to grow at about 5 per cent per year, and in the post-civil war era we have been consistently growing above 6 per cent. Sri Lanka is now regarded as one of the fastest growing economies in South East Asia, but due to Indian demonetisation Sri Lanka is facing a liquidity crunch, and the economy is projected to grow at
a lower rate of 5 per cent
the market to behave positively. Once the scenario improves, there is the possibility of procuring more plant machiner y, and the beneficiaries of this are likely to be the Indian equipment makers.
Many of the challenges experienced by retreaders in Sri Lanka are identical to those observed in other Asian and African retreading industries, such as increasing competition, long credits and a shortage of trained labour, as the young
With the slowdown in the Sri Lankan market, retreaders are focusing on increasing efficiencies, improving installed capacity utilisation and hiking plant automation to improve operations. SGR Precure, based in Kurunegala, the capital of the North West Province of Sri Lanka, is focusing on installed capacity utilisation. “We have the capacity to retread 4,000 tyres each month, but at the moment we are retreading in between 1,600 and 1,800 tyres in a month,” admitted Ganga Ekanayaka, Marketing Manager, S.G.R. Precured (PVT) LTD. The company also outsources OTR retreading in small volumes as SGR retreads tyres by the precure system only. OTR tyres are largely retreaded by the traditional
process in Sri Lanka.
A continuing slowdown has led retreaders to cut their prices, increasing competition in the market and long term credits. “We are now visiting our clients in order to offer maximum service, also educating fleet owners to stick to branded tyres as they are increasingly swayed by the low-priced imported new radials,” explained Shyamal De Silva, Marketing Manager. “Moreover, there is a perception that radials have longer life, which also brings down the retreading volumes.” He further voiced the opinion that if immediate measures are not taken to curb the import of cheap radials, overall annual retread volumes in Sri Lanka will continue to drop.
44 Retreading Business