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LITHUANIA
which is not surprising seeing as he has been involved since 1988. He started his business back in the times of Soviet Union, when the very word
“business” was prohibited. Firstly he was supplying tyres to the racers within the country, but when the communist regime fell and Lithuania
be brought back to operation. The important point is that he knows that we will perform this work, whatever it takes. We probably will work at the night shift, will work without breaks or rest, but the client will have the tyres in time. And, with no doubt, the quality of these tyres will be high,” Maciulevicius says.
Remote Retreading
Maciulevicius says that the carriers today are working in the West on so-called “tenures” scheme, which means that they are moving from the country for some certain periods of time of about 3-6 months. After that period, the trucks are coming back to Lithuania, but not every time, because in some particular cases the carriers have not had a break between these “tenures”, so one period of operation immediately follows the other. In addition, some transport companies completely left
this is the company’s know-how. He said that this practice also became possible, because Lithuanian tyre shops have also emigrated from the countr y, together with Lithuanian carriers, so in the western countries Lithuanian transport companies in fact have no problem to change the tyre at the tyre stations, that they have been accustomed to using for a long period of time. These tyre shops have an agreement with carriers, so this seems as though Lithuanian businesses have established well-organised networks in the West, and it is quite logical that Energija have found the room to be incorporated into this kind of network.
The Chinese impact
In fact, Energija was trying to meet the needs of the customers as much as possible even in the times of better market conditions. Maciulevicius believes that thanks
achieved nationhood and started building a market economy, he saw huge prospects in the west. Now his products are well-known not only in Europe. He reveals that he had even had experience supplying tyres to Canada by plane. This particular client spent a lot of money on transportation, but still remained satisfied with the result.
In general, Rato Asis continues to do well. In the past two years the company has expanded the geographical scope of sales with new countries in Europe and has started also selling some products via eBay.
Energija’s plant near Kaunas, Lithuania
Modified presses are used to accommodate the thickened and stiffer sidewalls of the racing tyres
Largest Lithuanian Retreader Learns the Tricks to Stay Afloat
Energija UAB is Lithuania’s largest truck tyre retreading company, which for almost two decades since the country’s independence has been the market leader. Surprisingly, unlike almost all the country’s other retreaders, Energija have not reduced their production volumes over the past few years. According to the company’s deputy director Sarunas Maciulevicius, Energija produces nearly 1,000 tyres per month with the actual figure fluctuating slightly according to the season. This makes up roughly 50 per cent of Lithuanian retreaded tyres in total and is almost equal to the volume the company was producing in the times before the current market crisis.
Maciulevicius explains that in the past Energija built up a marketing policy focusing primarily on high- profile clients. This strategy worked out very well, because when the current crisis in the country’s transportation market broke out and a large share of transit supplies from Europe to Russia had been blocked, leaving carriers without work, some small-size market participants shut down operations, while larger carriers managed to re-organise and move their business from Lithuania to parts of the European Union
where the demand for transportation services still exists, including Germany, France and Norway.
The emergency shifts
These carriers had strong ties with Energija, based on many years of flawless co-operation, so when leaving the countr y, they generally decided to not tear up this co- operation completely. There is an economic aspect, because for Lithuanian transport companies it is much cheaper to purchase retreaded tyres in their homeland than in Western Europe. At the same time, Maciulevicius explains that keeping the long-term ties in such a heavy economy conjuncture is not a simple task and requires some certain efforts from the retreader. “We often have a situation, when we receive a phone call from a loyal customer, who says that he is going to change the tyres for some part of his truck fleet and what is important is that he needs it tomorrow. This makes, let’s say, 50-60 truck tyres or more, and we need to make them within 24 hours or so. The client says that the trucks are already moving our way and that he doesn’t have a lot of time until they need to
Lithuania and have not returned at all, and this was a challenge that Energija also had to deal with. The company has elaborated a scheme known as “remote retreading”.
“To keep customers, we started the remote business, whereby we take casings from our customers in Western Europe, bring them to our facility for retreading and then, after retreading, take these tyres back to the customer wherever he needs. Obviously, this practice puts additional logistics pressure on the business, because we have to pay our own money for the delivery, but still this is a way of co-operation in which we see some prospects. We have used this approach roughly since 2013, when the current crisis started, and this was a kind of the response to the hard market conditions. After all, we believe that if you want to stay prosperous, no matter how hard it is, you will look for and find new ways to be so,” Maciulevicius explains.
He also said that he did not know if anyone else was also applying a similar scheme, but it seems that
to this attitude the company managed to persuade a large number of carriers not to shift over to the use of Chinese tyres. Cheap production from China has been overwhelming the market over the past few years, and the prices for these products started growing just recently. Energija has though experienced negative effects from the invasion of Chinese production, primarily because the margin from the retreading of a tyre went down to minimal levels, but Maciulevicius says that hopefully the situation will improve soon. Nevertheless, large quantities secure profit for the company, and this is something Energija can live with.
For instance, the company is now located in a territory, which was occupied by a collective farm in the times of Soviet Union. The large warehouses are full of casings and retreaded tyres, so it is obvious that the company has a large output. Maciulevicius stressed that although Energija is primarily focusing on high-profile transport companies, to secure large quantities it is also
30 Retreading Business