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BELARUS/KAZAKHSTAN
cheap tyres of the different brands from China and from Russia are competing among themselves on price and quality. In this context,
information from the Belarus government.
According to the national legislation the residents of FEZs have tax free
the ecology of our country”.
To retread tyres for specialised machinery also looks like a good idea, at least judging by the number of relevant requests that the company receives from its customers.
This would certainly require some investment, but in the end the
company could be amply rewarded. For instance, the largest manufacturer of special machinery in the post-Soviet space, BelAZ is also based in Belarus, and retreading tyres for its vehicles, in theory, could be very profitable for anyone who would dare to look into this segment.
retreaded tyres have their own niche in the market.
“The expected mileage of the retreaded tyres is better than on the cheapest new tyres, while if a customer runs some [European] branded tyres, he can get an essential economy [from retreading]. In this regard, I believe that as long as customers use pneumatic tyres, retreading services will be in demand in Belarus,” Busko explained.
In addition to Olga Brest there are two other retreaders operating in Belarus. According to Busko, this means that some sort of competition in the industry really exists. In this context, Olga Brest has “to keep an ear to the ground”, in order to be always aware what other market players have in mind. Nevertheless, so far, all retreaders in the country have enough orders.
State aid
Olga Brest operates in the Free Economic Zone (FEZ) Brest. Such kind of zones were set up all over the country to create a strong private sector enterprise and investment in Belarus and offer an enviable array of incentives to members, whether they are local entrepreneurs or foreign investors, according to the official
profits on all goods and services for five years, 50 per cent discount on VAT on import substitution goods, plus no taxes on real estate as well as several other valuable taxes and bonuses.
Being a resident of the FEZ, Olga Brest could really take some advantage from the state support, according to Busko. This makes its location very attractive. At the same time, the company also has a sales office in the country’s capital, Minsk. From this point, the company is able to sell its retreaded tyres all over Belarus.
Sweet dreams
Speaking about the future, Busko expressed hopes that the quality of roads would get better and that drivers would be more educated about how to manage their tyres properly. In this case, there would be many more good casings available for retreading in the domestic market. “Still, this sounds more like dreams, than real forecasts,” Busko
admitted. “Generally speaking, I believe that business will remain hard in Belarus. Despite this we will keep bringing benefits both to the transport companies, by extending the service life of their tyres, and to
As of early 2018 there were at least eight companies officially registered to retread tyres in Kazakhstan. It could be safety said that the local retreading industry is very young, since the number of retreaded tyres per capita in the country is still miserable and even lower when compared to neighbouring Russia. There is a room for optimism though, as Gigant KZ has recently become the first retreader in the country and one of the few retreaders in the post- Soviet space that managed to get some state aid for its project. The company has invested KZT80 million ($250,000) to launch a retreading plant with a designed capacity ranging from 10,000 to 13,000 truck tyres per year.
There is not a lot of information about this venture yet. All that is known is that Gigant KZ was founded by some unspecified German investors. It placed its facility in the Aktobe industrial zone, near the city of Aktobe on the south-west of the country and plans to import casings from Europe. The plant features some state-of-the-art European equipment and employs 25 workers.
Being located in the industrial zone, the company is able to take advantage of the free access to the well-developed infrastructure established by the authorities though state funding. In addition, there is information in some local news outlets that Gigant KZ managed to get some soft loans through state subsidies for its project.
The very fact that the government supports some kind of business is always important, since in this way the authorities recognise its value for the domestic market, plus it sends a clear signal to other investors that this segment is worth looking at. Aside from Gigant KZ, there are several other interesting retreading projects in the retreading sector of Kazakhstan that have been launched over the past few years.
Green Tyre
TOO Green Tyre is one of the six retreaders in Almaty, the largest city
in the country, its industrial centre and the former capital. This is the place where most of the industrial life of Kazakhstan is concentrated. The company was founded early 2017 and released its first retreaded tyre in May.
“The idea of retreading tyres was not the first to come to mind,” said Aset Kaziev, the founder and the general director of Green Tyre. “Initially, we planned to cast windscreens for cars. After that, there was an idea to produce blocks for construction. However, everywhere the competition was tough, so we were looking for our own niche”.
“Searching for investments, one day I visited the National Entrepreneurship Development Fund. I met some marketing consultant there, with whom I’ve been discussing various business ideas, trying to find out what were the most relevant sectors to invest in at that time. During one of those meetings I learned that
there is a technology to retread used tyres,” Kaziev said.
Kaziev stressed that before that conversation he no idea that the tyres could be retreaded. However, this opportunity immediately caught his attention.
“My intuition was telling me that this is a profitable business, and that this was a very attractive opportunity. When I came home I began a thorough study of this business. The more I learned about tyre retreading, the more I became encouraged. Therefore, I started looking for some equipment suppliers, comparing prices for different equipment, and how the workers could be trained to retread truck tyres,” Kaziev said. Three months ago, when Kaziev was browsing the market situation, he discovered that there was another retreading plant operating in Western Kazakhstan, near the city of Aktau. The distance between the two cities is around 1,200 km, but Kaziev still decided to visit that facility to better learn what the retreading business was about.
“I visited that plant and looked at their products. Their retreaded tyres were looking exactly like new
ones. Moreover, according to the
Kazakhstan Retreading Industry Grows
60 Retreading Business