Page 40 - RB-82-17-3

FINLAND
performance in the OTR segment stands at 1,000 – 2,000 tyres per year,
but says that the metal moulds would work better than rubber
Ari Steiner
13 years ago Finnish retreaders were making 230,000 retreads per year, while now this figure has reduced
to 160,000 retreads per year. At the same time, it is hard to say, whether
the output will decrease further or not, because all good tyres in Finland are still going to retreading plants and in most cases truck tyres are retreaded more than just once. Steiner estimates that there are nearly 100,000 new truck tyres being sold in the countr y per year, so for Finnish retreaders the import of quality casings from the rest Europe is very important. Kari Hypponen reveals that his company works on 40 per cent with the clients’ casings and nowadays purchases nearly 60 per cent
from the open market.
In addition, Euromaster enjoys synergies from the cooperation of its branches in various countries, as according to K ari Hypponen, the Finnish factor y is able to import casings from the company’s divisions abroad and to sell both OTR and truck tyres through the foreign branches. In particular, such a cooperation is now developing with Swedish Euromaster.
In general, he explains, the company does not notice any shortage in quality casings. For now, almost all casings for the company’s needs are purchased in Europe, and even though Kari Hypponen had heard some talks about the shortage of quality casings, he didn’t notice it himself.
Winter is coming
The retreading business in Finland also sees some support from the recently adopted safety legislation, because the government now demands ever yone to have good winter tyres already in the autumn. As it is known the legal minimum tread depth in Europe is 1.6 mm across the central three-quarters of the tread width and round its entire circumference, but new rules recently came to force in Norway requiring winter truck tyres to have tread depth no lower than 5 mm. In Finland, it is 3 mm still, Ari Steiner explains. There are some similar requirements in Sweden and in Russia, and the trucks coming from Russia to Scandinavia also must be equipped with good winter tyres.
In addition to the requirements on tread depth legislation, Norway has stipulated that winter tyres should have some special patterns suitable for winter conditions. According to Ari Steiner, there is a common trend all over the region as legal requirements for winter tyres are getting stricter.
So, in theory, this could be a reason why the retreading industr y will keep holding on in the future, as apparently the cheapest Chinese tyres won’t fit the new legislation. Moreover, not ever y customer would really opt for Chinese products to be used on the roads given Finland’s extreme and from time-to- time unpredictable weather conditions.
Hypponen, there were no problems with the retreads made on certain Chinese casings, and he does not rule out that in future this niche could expand for the company, as it will do more Chinese retreads. Currently, Euromaster is working with Chinese tyres on customer casings only, providing the guarantee for the retreading, but not for the casing itself.
No really dark clouds on the horizon
K ari Hypponen says that Euromaster has made quite big investments into the retreading business in Finland and that has been an “investment for the future”.
moulds if the production performance was around 20,000 tyres per year.
The main competitive advantage is that the use of rubber moulds enables the plant to easily change sizes and patterns. The rubber mould is flexible, so the plant, as a rule, does not need to make the casings fit to the mould, as would be the case if using the steel mould.
Not an easy market anymore
K ari Hypponen estimates that over the past decades there were more than 100 companies engaged in tyre retreading in Finland, but now only 25 of them are left. This does not mean that all of those retreaders went bankrupt, and in fact only very few retreaders in the country actually reported on the insolvency in the past years, so most entities ceased to exist simply due to some kind of merger or acquisition deal. K ari Hypponen points out that the industry has been under constant pressure from cheap Chinese tyres since 2012, and the market situation today is not as easy as it once was. He says, however, that in Finland and in general in Northern Europe the situation with Chinese products is slightly different to other parts of Europe, because the country has really harsh winter conditions, and the customers are aware that the cheapest Chinese tyres cannot tolerate these conditions.
According to the estimations of Ari Steiner, the retreading industry in Finland is steadily reducing in terms of production performance as nearly
Kari Hypponen also agrees that the tough winter appears to be an important competitive advantage for the retreading business in Finland. Almost all customers would like to meet winter with new tyres and new patterns, so this is the reason why the industry will not only endure, but also may even slightly recover in the future, he says.
However, there is a huge difference between various Chinese tyres, Ari Steiner points out, and it is quite possible that some of them in future can bring some new opportunities to retreaders.
K ari Hypponen says that the market landscape is constantly changing and nowadays retreaders in Finland are waiting for some rise in prices for Chinese tyres.
It is obvious that prices cannot stay at such a low level forever, he believes, adding there is a set of factors influencing the competitive struggle between retreads and new Chinese tyres, and in particular the prices for raw materials from European brands should be also taken into account.
At the same time, Euromaster is already retreading some Chinese tyres, obtaining quite good products as a result. According to K ari
He predicts that in 5-10 years the market will stabilise and the company will be right at the same place as it is now. He believes there is no chance the retreading industr y will cease to exist, primarily because of the environmental impact it is providing, as the customer can obtain a tyre with the similar operational performance by the use of only 20 kg of rubber instead of 60-70 kg for the new tyre.
K ari Hypponen admits that currently his plant is not operating at full capacity, at least in the truck tyre segment. There are two production lines at the plant, and one of them is operating on morning and day shifts, while the second is operating in day shift only. Basically, both lines can operate in three shifts, so this will increase the production performance of the plant nearly twofold compared to the current rate. So Finnish Euromaster is not only expecting a rise in demand for retreads in future, but is also up to the challenge.
40 Retreading Business