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LITHUANIA
Energija uses Italian equipment and Ringtread is the quality product used from Marangoni
same time, over recent years the company has several times tried to conduct the retreading of Chinese casings, but this experiment hardly could be called successful, because in general only 20 per cent of tyres retreaded on Chinese casings are really fit for further use.
Speaking about the future, Maciulevicius says that a lot of things will depend on Chinese tyres, explaining that in China tyre manufacturers receive subsidies from the government, obtaining
unfair competition advantage against their competitors in Europe, so somebody should deal with this situation. At the same time, he indicated that, in general, Energija has not exhausted all possible development opportunities, carefully speaking about possible export plans. Maciulevicius unveils that the company is considering some possibilities in this direction, adding however, that he is not in position to disclose the details yet.
working with smaller carriers. He explains that these companies basically are not working on the “tenure” scheme, mostly focusing on the internal and local cargo traffic, saying that although the demand from them is smaller, compared to the large-size market players, they are still important.
The Geographical Advantages
Energija is based near the city of Kaunas, the former capital of Lithuania and the second largest city in the country, located right in the middle of the key highways, including E85, which is the main internal arterial connecting the sea port of Klaipeda with Vilnius, as well as E67 and E262, which are flowing to Central Europe and Scandinavia respectively. Although Vilnius remains the main industrial and trade centre of Lithuania, where offices of most transport companies are situated, Kaunas obviously has its own geographical advantages in terms of the retreading business. When we were driving to Energija, Maciulevicius warned us that there
are two roads to the facility, one through the city’s dam and another one through the city itself. The road through the city is longer and you have to sit in traffic jams for a while, especially in the rush hour, but the management of the local hydro power plant often closes the dam for maintenance work, blocking any traffic on this way, so by choosing this path you risk wasting a few hours or even going astray, trying to find an alternative route.
Maciulevicius explains that this is a common problem for the facility and one of the reasons, why the company’s executives decided to relocate it. He explained that for passenger cars it is not actually hard to ride through the city, but when the clients send the fleet to change the tyres with a column of 30 trucks at once and the dam is closed this appears as a real challenge. However, this is not the only reason why the company decided to move out. The old production houses are really old and require capital repair or possibly re-building, which could be feasible without the transport
accessibility problems.
The future remains vague
Maciulevicius says that his company is the only retreader in Lithuania, working with Marangoni’s Ringtread technology. He believes that this is an important advantage, because of the higher quality of the finished products. Energija, in general, is keen to produce premium retreaded tyres, because this is the only possible way to keep clients in the current situation. At the
Vilnius Retreaders in Search of Medicine Against the Depression
In Lithuania Vilnius is not just the capital, but also the financial and economy centre. The Lithuanian economy in general has been under pressure in recent years due to the reducing population, as young people have moved out of the country, searching for a better life primarily in the UK and Norway, so over the past two decades the population of the country has reduced from some 3.5 million to 2.8 million. However, this problem has not affected Vilnius, where population on the contrary has been growing, reaching nearly 1 million people, according to some unofficial estimates.
The market participants in Lithuania say that the country accounts for third or fourth largest truck fleet in Europe and it enjoys a strategic location in the middle of traffic routes connecting the Eurasia Economy Union and European Union (EU). The inland cargo traffic between these two economies has certain complications, in particular because Russian trucks have not been authorised for operation in Europe, while transport companies from Western Europe, especially small-and medium-sized ones, have been apprehensive about operating beyond the eastern borders of the EU.
This situation has put Lithuanian transport companies in the perfect spot and helped create a strong cargo carrying industry in the country, providing a high demand for retreading services as well. The city became home for three retreading companies: Guminta, Motorida and Baltread, who were doing exceptionally well before 2013, when a number of negative factors combined to spoil the market conjuncture. Firstly, Chinese companies came to the country offering tyres at the extreme lower
end of the price spectrum. The second major effect was when due, to the Russia-Ukraine conflict and associated sanctions, trade between Europe and Eurasia was subjected to serious restrictions and severely slashed.
The depression in the transport industry put a heavy burden on the retreaders. It seems that Baltread failed to find the way to proceed and ultimately ceased operation. Guminta and Motorida, on the other hand, keep working and are not going to give up. At the same time, the situation in these two facilities is very different, with the two companies having a very different organisational structure.
Retreading is a difficult but promising business for Guminta
Vytenis Gulbinas, the managing director of Guminta, explained that the plant was established in 1996 and was the part of the family business group, which now involves multiple divisions, including real estate, logistics and transport. Two decades ago it was in the transport business only and, in looking for the way to cut operational costs, the company’s executives discovered the lack of retreading capacities in Lithuania.
“Initially we opened Guminta only for supplying our own trucks with retreaded tyres, but it developed into a business for the open market, which what we are still doing now. Over the years there were a lot of things to deal with, including the global financial crisis, which hit the local transport market really hard, then the Russian crisis in 2014. So there are a lot of things to cope with in this business, but we are still here and we are happy with this fact,” Gulbinas says.
“We have been with Bandag for 20
32 Retreading Business