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FINLAND
9,000 retreaded truck tyres, but that was a kind of a feat, achieved at the time when retreading in Finland was at its peak.
In 2016 the company output was nearly 4,500 retreading tyres in the truck segment, including 3,500 truck retreads and 1,000 tyres for forklifts. Vilkman said that when the invasion of Chinese truck tyres took the
little bit more expensive for the company, but still works well. Secondly, it is important to have the right rubber, as it is obvious that you cannot use the same tread as it is being used for passenger tyres. The rally tyres are used in rather extreme conditions, at high speed and on winter roads, so one way or another they will not last for long. However,
you need to make sure that they will last for the whole designed time without any problems. Markku Vilkman said that they found the right compound that makes their tyres perfectly suited for the conditions of rally races. He did not unveil how much time and effort Keskipinta Oy has spent trying different formulas, but at the moment the
rubber is claimed to be very good, and the company is not planning to change anything in the retreading process in the foreseeable future. The company’s customers used to purchase several batches of retreaded rally tyres in one order, because, as already has been mentioned, the service life for such tyres is not so long. In some particular races, these tyres are even getting changed during a single race. This is mainly because each tyre has spikes, and they are seriously loosening the tyre texture during the race.
At the moment, there are three main patterns that Keskipinta Oy uses for the production of rally tyres, which basically are similar to Michelin patterns, but for winter rally tyres the company is using its own pattern. Among others, the company is manufacturing 16-inches rally tyres, and this is a very important fact to mention, as long as this size is considered as a very rare one, and customers are willing to pay more for it, but it is also harder to gather the casings of this size.
Other business opportunities
In addition to the retreading of truck and rally tyres Keskipinta Oy also performs a service that probably nobody else does – it retreads carriage wheel tyres. It is hard to believe that a lot of people in Finland are really using horse-drawn carriages in the 21th century, but they actually still exist in the country in the form of a hobby.
Markku Vilkman explained that this is a kind of technical retreading, as it
does not involve any air treatment, and the company is only doing some buffing, removing the old layer and then putting on the new layer. The company cuts special rubber sheets to the necessary width, depending on the size of the wheel, into strips and then uses them to perform retreading.
It is obviously not the main business for Keskipinta Oy, but the company is happy to do it, even though there is no chance this niche will earn them a fortune. After all, it means some cost-savings for the owners of the carriages, and the company is happy to assist.
Keskipinta Oy also specialises in manufacturing technical rubber that is used on industrial lifting equipment in Finland to protect floors and goods. This is also a small niche of the company’s business, but the company says it is still worth it. Nowadays, Markku Vilkman says that the company is also getting involved in the retreading of Chinese tyres. He did not say which specific brands the company is working with, only saying that during incoming inspections Keskipinta Oy checks all casings and if they are good enough, but of Chinese-origin, the company will still use them for retreading. Things seem to be a little bit more
retreaders, but it will not solve all the industry’s problems.
Better stock planning
Vilkman acknowledges that over the past years some company’s clients opted for the use of new Chinese tyres, instead of retreading tyres and this trend is common today in the retreading business. In Finland, however, many customers have moved back to retreading tyres, especially when it comes to winter tyres. Still on this background, Keskipinta Oy has had to perform some business optimisation, searching for ways to cut costs and improve operational profitability in response to the decreasing occupancy of its plants.
According to Markku Vilkman, his company has much more warehouse space compared to the other retreaders in Finland, and the aim was to figure out how to use it right. The company has not reinvented the wheel in this case and it is just eliminated all gaps in the supply chain, ensuring that there will be no situations, when some raw materials are required and they are not available.
In this area, Keskipinta Oy is also cooperating with Finnish wholesaler
Keskipinta Oy’s Markku Vilkman
demand for retreads down, the company was able to start retreading more tyres for forklifts, and this segment today keeps the plant occupancy high enough.
Truck tyres, however, are not the only sphere of interest for Keskipinta Oy, as the company has a very well- diversified business structure. It is also manufacturing retreaded rally tyres in rather small quantities of just several hundred units per year. This niche, nevertheless, seems quite promising, due to the higher margins and less competition, although it has certain nuances.
According to Markku Vilkman, basically the retreading of these rally tyres has a lot of things in common with the retreading of truck tyres. Firstly, the casing goes to the buffing machine, then you need to put cushion rubber, then cure rubber, he explained. After that the right pattern is selected and the tyre is put inside the envelope of the right size and eventually goes to curing.
This sounds quite simple, but it is not really easy in practice. The first issue is casings. Sometimes customers come with their own casings, but not quite often enough. In this niche, most customers are foreigners, Markku Vilkman said. Keskipinta Oy currently sells retreaded rally tyres all over the world, including to India, Japan, Canada, Sweden and Norway.
So, Markku Vilkman, revealed, they are collecting casings from specialist dealers, but sometimes, when they cannot find appropriate sizes, they have to buy new passenger car tyres and use them as the casings. It is a
complicated when customers come with their own Chinese casings. In this case, the company will retread them anyway, but will issue a warranty only on the retreading service performed, but not on the casing itself.
Speaking about competition with new Chinese tyres Markku Vilkman says that in his opinion the price situation in the market today looks quite unhealthy. He says that everybody is now waiting for the Chinese tyre factories to raise their prices in the coming months, but the challenge is that the raw materials suppliers are also raising their prices. The long-awaited rise in prices for new Chinese products will bring a heavy sigh of relief from the
Green Tread Oy, jointly planning some raw materials spending, giving the company’s working schedule for a certain time period. This is all very important and allows the company to remain cost-effective and competitive on price. In the segment of rally tyres the company’s products are now 50-60 per cent cheaper compared to new tyres, so there will be the demand for them anyway, while in the segment of truck tyres the industry landscape is really tough, and constant work here is needed in order to ensure that the customers will stay with the company.
38 Retreading Business