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SOUTH AMERICA
ALARNEU Associations Report on South American Retread Trends
question. This had been attributed to reductions in the price of new tyres and the growth in imports from China.
The continent’s largest market, Brazil, has also seen a reduction in the number of retreads during the last two years. According to Roberto de Oliveira, following several years of growth from 2006 to 2013, during which the market rose from 7.5 million to 9 million units, the market fell to 7.2 million units in 2016.
Argentina, whose market has been much more closed than other South American markets still has a healthy retreading quote of 820,000 retreads compared to a replacement tyre market of 960,000 new tyres – an 85 per cent retreadability rate. The figures provided by ARAN Director Esteban Rappazzo also showed casing rejection rates of only 12 per cent - much lower than, the 20-25 per cent reported in Uruguay and Colombia.
One of the key sessions during the International Retread Conference in Chile was made up of reports from the various ALARNEU member associations. The feedback from across the South American continent was largely similar, being characterised by reductions in market share for retreads and increased challenges from imported new tyres from China. On the positive side though, many associations saw marginal
improvements during 2017. Santiago Avellán from the Ecuadorian association ANRE talked about the structure of standards in Ecuador and the impact of their introduction. As in many countries the increased standardisation and regulation of quality is welcomed, as is the certification of the process and the environmental benefits, although there had been more plants working informally on the margins of the law, more costs for established companies and increased bureaucracy
Avellán reported that the retreading market had been affected by the introduction of measures taken to protect domestic tyre production introduced in 2015 and subsequently removed in 2017, as well as by economic difficulties experienced in 2016.
Retread production grew in Ecuador in 2014 and 2015 to 372,000 units but fell 15% in 2016, with a further 3.8 per cent fall estimated for 2017. Meanwhile, retread market share had been on the rise up to 2015, when it reached 48.79% and increased to as high as 56.92 per cent as the measures to protect
local production took hold, and the number of imported new tyres fell, but in 2017 the effect of removing these safeguards is expected to result in retread share falling back to 41 per cent.
For the Colombian Retreaders Association, also called ANRE, Hernando Diez Vargas reported that the market share of retreads had fallen from 45 per cent in 2007 to only 20 per cent in 2017, a trend which he put down to the activities of informal and illegal producers, a crisis in transport sector, five years of low quality Chinese tyres, and low knowledge on the part of the haulier with regards to effective tyre management.
Particularly interesting in Diez’s presentation was an analysis of retreading rates and acceptance/rejection rates by brand, which showed that Michelin (33 per cent) and Goodyear (24 per cent) accounted for over half of the casings retreaded in Colombia. Michelin had a significantly lower rejection rate at 15 per cent compared to other leading brands, which hovered around the 20 per cent mark. Interestingly, all rejection rates have fallen since 2015, which may indicate a lack of casing availability due to increased imports.
IN Uruguay, the picture painted by Antonio Corbi and Mauricio Labadie of CURN was somewhat similar. Uruguay has also seen a reduction in retreading rates, falling from 7,800 units per month in 2012 to 4,500 in 2016. Despite this, the association was predicting a small recovery in 2017 to 5,000 units per month. Retreading rates had also fallen over the period in
It is now a year and a half since Eduardo Convalia Cox came out of retirement and purchased the struggling retread plant owned by his previous employers. Since then, armed with an ambitious plan to make his company, Blotech, the
Santiago, and is looking at developing a comprehensive concept for fleets that incorporates retreads, new tyres and service aspects such as equipment for tyre pressure monitoring.
Blotech was established by
Blotech Aims for the Top
The Blotech team in the factory at Lampa near Santiago. Eduardo Convalia Cox, the General Manager is on the far left, Factory Manager Luis Oyarce on the far right
leading retreader in Chile, he has turned the plant around with over $1 million in investment in machinery and rubber, returning it to the production levels of five years ago. The factory is now making 1,600 retreads per month at its factory on the outskirts of
Convalia together with an investment partner. The new company acquired the old Bandag factory owned by Convalia’s ex- employers in August 2016 and with the support of Vipal, set about creating a new, modern business in the township of
Lampa, a few miles to the north of Chile’s capital, Santiago.
Says Convalia; “Our idea was to rescue the business. We saw the problems that the retreading industry was facing, but we saw this as an opportunity. We now need to continue to develop apace in order to become one of the six or seven companies that will survive the shake-out in this sector.”
Convalia has an interestingly realistic approach to the retreading industry. “Retreading is not
Eduardo Convalia Cox demonstrates the factory management system at Blotech
26 Retreading Business