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THAILAND
followed by a phase when the market was flooded with cheap imported tyres, and branded casings vanished from the market.
“Now new Chinese tyres are sold at 5,100 Baht and retreads at 3,400 Baht. The price of new tyres has dropped by almost half, and retreads have become costlier with raw material prices continuing to go up, resulting in a shrinking price gap,” he explained. Branded tyres are still available at more than 8,000 Baht. Now small fleet operators in the countryside prefer low priced unbranded tyres. “These fleet owners have no idea of cost-per-km (CPK) and operate on a single life tyre concept,” he said.
“Though prices of tread rubber
continue on an upward trend due to high input costs, the quality of the end product has steadily gone down,” he said.
Xin Rui has two autoclaves of 14 and 26 tyres respectively and 8 hot cure moulds. Currently, it operates one 14 tyre autoclave and 4 hot moulds, while the larger autoclave has lain idle for a couple of years due to low volumes. The company sources about 5-7 tons of tread rubber and camelback from Indra Rubber each month.
With retread volumes down, the company has entered into tyre distribution also and sells a range of brands including Bridgestone, Firestone, Dunlop and a number of Chinese brands.
our own experience that the rejection rate in branded tyres is below 20 per cent, whereas it is more than 80 per cent in low priced imported tyres,” he said.
Hui also believes that the economic upturn has had a direct impact on the sales of branded tyres in the Thai market. “There is slight improvement in the sales of branded casings last year, that is a positive signal for the struggling retread industry.”
Among the priorities for KRI in the next few years is shifting the plant from its current location to new premises. “Our current location has experienced an influx and a concentration of residential dwellings near to our plant and this is going to increase in the years to come, which might affect our growth. Therefore, we are looking for a suitable location in which to relocate the plant in the next 3-4 years,” he revealed.
With retread volumes down owing to low price tyre imports and the sluggish economy affecting fleet owners, prominent retreaders in Thailand are focusing on big fleet operators who prefer quality branded new tyres as well as investing in upgrading their plants.
“We have made investments in the latest retreading equipment in the last 3-4 years and are focusing on big fleet owners with a quality approach who are willing to pay the price for good retreads,” said Raymond Hui, Managing Director, Kasem Rungraung Industry Co Ltd. (KRI).
According to Hui, this change in strategy has started paying-off and is reflected in improving volumes. As part of this process, the plant
neighbouring Malaysia based manufacturers Kayel and Eversafe, split equally at 50 per cent each.
KRI has upgraded its plant machinery in the last 3-4 years adding a Matteuzzi buffer and builder, an AZ cushion gum extruder and a shearography machine (two camera). The plant is installed with two Ferlex chambers of 13 and 22 tyres respectively, sourced from Newera. “Our equipment is new and adequate for another five years at current production levels. However, we are keen to have an upgraded shearography machine with four cameras and a combined AZ cushion gum extruder and builder in the future,” he said. However, KRI has no immediate plans to invest in new
10,000 kilos of tread rubber from the Australian plant every month. On retread prices compared to other retreaders in Thai retread market, he replied, “We are in the highest price bracket, charging 25 per cent more compared to other retreaders in the domestic market.” The unit retreads TBR tyres and offers a two-year guarantee. Chaichodgroup also sells new tyres from brands like Bridgestone, Vee Rubber, Maxxis, Apollo, Firestone etc.
Although the Bridgestone Bandag franchisee remains operational, targeting to double production, Bridgestone’s own retread centre and tread making facility in Saraburi and Chonburi are no longer operational.
These include the Thai Bridgestone owned “Bridgestone Bandag Retread Center” (BBRC) opened early 2010 at Nong Khae in the Southern part of Saraburi Province in Central Thailand, which had the capacity to retread 44 units each day, as well as Bridgestone Bandag Manufacturing (Thailand) Co., Ltd. (BBMT), which opened in Chonburi Province (about 60 km Southeast of Bangkok) in November 2010 to produce precure tread with an investment of ¥4.4 billion.
Bandag Thai Franchisee to Double Production from 2019
Sakarin Tongsukdee, Director, Chaichodgroup
KRI to Shift Plant to New Location
At Samutsakorn
in the outskirts
of Bangkok,
Chaichodgroup
operates as the
sole Bandag tyre
retread
franchisee in
Thailand.
Opened in 2014,
the plant
retreads around
1,000 tyres per
month.
Chaichodgroup
is aiming to
double plant production by next year. “We hope to increase production to 2,000 tyres per month by 2019 on the strength of the sale of standard treads,” said Sakarin Tongsukdee, Director, Chaichodgroup during a plant visit.
The plant operates on equipment supplied by Bandag, and is installed with 22 tyre autoclave. On the subject of price differences between premium and standard treads, Sakarin added, “There is a difference of 15 per cent between the prices of standard and premium treads.” He believes the price difference will give an edge in the market as the quality of the product remains high compared to competing tread brands in the Thai market.
The competitively priced standard category tread-liner is likely to be introduced in May this year. “This would increase our customer base among the price-sensitive segment and is expected to double our retread volumes,” he said.
The Samutsakorn based franchisee sources tread rubber from Bandag’s Australian plant at Wacol, Queensland. “The standard category treads will also be supplied by Bandag,” he added. The plant follows the Bandag retread manufacturing process and is audited regularly.
The company imports about
Raymond Hui, Managing Director, Kasem Rungraung Industry Co Ltd. (KRI)
accredited with ISO 9001:2015 last month. “International accreditation also brings confidence among large fleet owners in the strict quality standards maintained in our production process,” he said.
The Samutsakorn based plant opened in 2004 and retreads 1,500 tyres per month, sourcing tread rubber from
equipment due to the continued market downturn over the last five years caused largely by the growing acceptability of imported low-priced single life tyres.
The company has its own transport operation maintaining about dozen vehicles. “We run our fleet on branded tyres and have observed by
30 Retreading Business