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LITHUANIA
A Focus on the Lithuanian Passenger Tyre Retreading Industry
you would never be able to find one no matter how hard you try. The retreading of racing cars is a very profitable business, and the margin from one tyre exceeds
the cost of casing and
raw materials several
times.
In this regard, it is not a
surprise that plants for
the retreading of racing
tyres have sprouted like
mushrooms after the
summer rains all over
Europe over the recent
couple of years.
Dzeventkauskas states
that only a few years
back from now the
competitive
environmental was
much easier, compared
to the present. In recent
years some plants for
the retreading of racing
tyres were opened in
Germany, Portugal,
Poland and elsewhere.
In addition, there is a
clear economic benefit
for the racers, because
in this segment the
price per tyre is about
EUR 300 per unit, so driving four laps or 20 km would cost the racer EUR 1,200 using the new tyres and only EUR 400 using retreaded tyres. Dzeventkauskas emphasises that his production is fit not only for amateur racers, as some might think, but also for professional racers, who are participating in the serious race events.
In terms of technology there are several peculiarities, compared to the common technology of passenger tyre retreading. Dzeventkauskas reveals that tyres for racing cars must be equipped with thickened sidewalls, and he is producing these sidewalls with forge-rolling. In terms
of equipment, the key thing is that the vulcanizing presses need to be modified so they can take in tyres with reinforced sidewalls.
Arunas Dzeventkauskas of Rato Asis with a racing tyre destined for Unigom
It is hard to say whether the retreaders of passenger tyres in Lithuania in general have been doing well in the past few years. There is not a lot of information available on the web about the activity of entities engaged in this type of business, although market participants say there are several companies actually operating in the country.
Aivars Duka, the spokesman of the Green Tread Group, the major wholesaler of tyres and retreading materials in Finland and the Baltic region, reveals that he spoke to a private entrepreneur named Oleg Agromov, who operates a line for retreading passenger tyres around 50 km away from Klaipeda. He said that the situation in the segment is tough, primarily because of the strong inflow of retreaded passenger tyres from neighbouring Poland. According to Agromov, several years ago the Polish authorities adopted new environmental protection legislation stipulating that tyres should not be simply thrown away to the dumps. This law among others boosted the demand for retreading services in the country, while the lack of available capacity in the industry sent market prices soaring. This situation did not last for long, as since 2013 cheap Chinese tyres have put a heavy pressure on the industry, and the demand for the retreading of passenger tyres in Poland has gone back down.
Agromov says that as a result Polish retreaders have directed their eyes to neighbouring markets, including Lithuania, and in order to push out the local entities they applied a dumping approach. As a result the price competition with Polish tyre manufacturers today is really fierce, and over the past few years it has actually brought Lithuanian retreaders down. In particular, the line of Agromov now is operating only for a couple of months during the year, on the verge of the winter season when people are changing tyres and the demand is slightly up. Agromov suggests it might be interesting to visit Poland to check out how they manage to keep wholesale prices so low. The best guess of some Lithuanian market participants is that Polish retreaders enjoy particularly low prices for rubber and raw materials for retreading, but this is only a theory. In addition to Agromov there is a company named Dilumas operating a retreading workshop based in the town of Panevezys halfway between
Vilnius and Riga. However, it is hard to say how it has actually been doing over the past few years. The company’s website says only that has operated for 30 years, always was and still is the only retreader in Panevezys, and is also offering the best prices for retreading services in the city. Dilumas is working on Italian equipment and claims to ensure the high quality of production, not least because the retreaded tyres are adapted to Baltic conditions, where there is a lot of snow and ice in the winter season.
The advantage of being unique
As always in the bad times, there is someone who manages to thrive. In the case of the Lithuanian passenger tyre retreading industry this statement is fair for Rato Asis – a small workshop located on the outskirts of Kaunas, managed by director Arunas Dzeventkauskas. He says he doesn’t care too much about competition with Polish tyres, the reason being that Rato Asis does not retread passenger tyres, but is retreading racing tyres, including those for motor rally and cross- country driving.
The price for such tyres is around EUR 100-200, depending on the size, the degree of rigidity and numerous other things, while the demand for these products is high, primarily due to the fact that racing cars need a lot of tyres. It is obvious that these cars use tyres in a very special way, so the mileage here in some cases doesn’t exceed 40-50 km. Dzeventkauskas explains that he is taking only the best
casings he is able to find, only of such brands as Michelin and Continental, and there is no way that the casings could have any imperfections or problems.
The question arises: why not taking the casings from the racing cars and work on them. Dzeventkauskas explains that this business is not so simple, and the casings from racing cars are removed from the vehicle and taken to the supplier of the tyre immediately after the race. There are none of these casings available in the market at all and
Dzeventkauskas explains that despite the unique nature of this business, the pressure of Chinese tyres is felt here as well. Due to the presence of cheap products from China in this segment, his company now retreads only winter tyres for racing in the countries where winter is associated with snow and ice. Here Chinese manufacturers cannot compete, because racing on winter roads requires tyres to not get rigid due to the low temperatures. For this, the manufacturer needs to add special polymers, and this seriously increases the final price. Dzeventkauskas has extensive knowledge about this business,
Only premium tyre casings with no faults are used at Rato Asis
28 Retreading Business