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GLOBAL RETREADING CONF.
The retreading industry in Latin America has been heavily impacted by cheap imports, losing around 21 per cent in production volumes in the commercial tyre segment over the last five years, Leandro Rigon, the spokesperson for ALARNEU said. Nevertheless, the local retreading industry is still rather strong, and in the years to come
with the average figure being estimated to be closer to 1.4.
“In many countries in the region, tyre imports are not regulated. The imports of cheap tyres are not being subjected to any control. And the competition [with imports] narrows opportunities for retreaders. The supply on the market exceeds the demand, and this brings a
disastrous impact on the business chain,” Rigon admitted.
Against this background, the production of commercial retreads in the region shrank from 14.8 million in 2012 to 11.7 million in 2017. Brazil, Ecuador and Columbia are holding up primarily thanks to the various restrictions and duties entered against imported tyres, while in some other countries where there are no steps aimed at curbing cheap imports, the retreading industry has lost up to 70 per cent in production volumes. “Colombia is working on an extension of the anti- dumping duty on imports of
Chinese tyres. Unfortunately, there is not much hope, as the remaining new tyre industry is too small. So, it [decision on the duties] relies solely on the strength of the retreading industry,” Rigon said.
In general, the situation in regard to the retreading industry is very different in every particular country of the region.
“In Brazil, for each tyre produced or imported, another unit must be submitted for disposal. Nowadays, there is a logistic chain that is collecting tyres around the country and delivering to recycling facilities. Retreading comes in, whenever the tyre is qualified to be retreaded. In such a big market, retreading is an important business and so, the savings in retreading against buying new tyres make a difference of around Eur500 million,” Rigon informed.
“In Argentina, an end of life programme is applied and tyres must have a proper disposal. Retreading is in that programme, however it is considered only as second priority. First priority would be any type of re-use which can extend a tyre’s life. The Argentinean Tyre Retreaders Association is working with authorities to bring more importance to retreading as an extension of a tyre`s life,” Rigon said.
It is believed that the retreading industry could take some advantage from the recent law adopted in Chile that demands that the
wastesof some priority products must be treated in a proper way with tyres listed among these products. There, work is undergoing specially to set some standards for the tyre industry and an important role could be given to the retreading industry.
“In Colombia every importer and producer must participate in a selective tyre collection program and environmental management. Every year they need to collect and give a correct disposal to around 50p per cent of the volume of tyres sold in the previous two years. This percentage will increase through the years until it reaches 100 per cent. Retreading is considered as the first option to prevent waste generation. Any other way of use comes second in line,” Rigon said.
retreading industry as well. Luckily for us, it looks like the tyre industry is
set for growth now. If you look to the statistical information you can see that there has been a big slump in market volumes since 2013. Like in many other countries it was primarily associated with the Chinese tyres,” Varughese said. Basically, over the past few years the tyres coming from China were offered in the Indian market as the same or even at lower prices compared to retreads, Varughese informed. The anti-dumping duties introduced by the Indian government against cheap imports on tyre market did not bring an immediate effect, but the following measures aimed at “the black market” did.
Leandro Rigon from Vipal spoke on behalf of ALARNEU
Paulose Varughese, Director at Midas
could feel some support from the protective measures that are currently under consideration by the local governments.
“Looking at the figures from 2017, the Latin American market still accounts for a big portion of the world’s retreading activity. The entire production is 17 million retreads a year, with almost 12 million related to commercial tyres,” Rigon informed.
There are still around 5 million passenger retreads, with almost all of them being produced in Brazil. However, this segment was almost two times bigger before 2000 when Brazilian authorities banned the import of used casings. As of today, the casing generation in the local markets is not high enough to meet the demand from the local retreaders, according to Rigon. “The share of the market between countries shows that Brazil is holding around 62 per cent, followed by Mexico, with over 10 per cent, Argentina with 7 per cent, Colombia with something over 5 per cent. So that makes 85 per cent of the whole market. Central America and the west coast of South America, hold the rest of it, even though some small countries don’t figure on it, because there is so little of no activity,” Rigon said. In total, there are around 2,040 active retreading shops in Latin America, with 1,200 located in Brazil. The retreadability in the region ranges between 0.2 and 1.8
“Tyre imports in Ecuador must be authorised by the authorities, under a special permit. Each importer presents its tyre import plan, so the authorities can determine the specific allowances.
A retreading plan is a requirement for all importers and producers. By the end of the year they must present the proof on the volume of retreads so that the authorities can analyse and renew the permits. If an importer presents a smaller number, his allowance would be adjusted for the next period. Right now, 60 per cent of the imports must be retreaded,” Rigon informed.
Things are looking up in India
India is among the world’s fastest growing economies and the government is spending a lot of money on various infrastructure projects now, which are driving up the performance in both new tyre and retreading industry, Paulose Varughese a director of Midas, said. “In India, we believe that what affects the tyre industry, affects the
“The problem was that the Chinese tyres were being sold at the black market with the sellers not paying any taxes. The government decided to fight against it with the demonetisation reform. So, this package of measures has already worked very well for the new tyre industry, and we hope now that it would bring long-awaited relief to the retreading industry as well,” Varughese said.
The retreading industry in India has many unique features, and one of the most remarkable of them is probably the share of the small- scale business on the market, Varughese said, adding that he travelled all over the world and has never seen the same picture anywhere else.
“I would estimate that around 90 per cent of retreaders in India are small-scale companies with the production performance less than 200 tyres per month. Less than 1 per cent of retreaders in India are releasing more than 1,000 tyres per month. In fact, in the whole country we may have less than 15 retreaders with production capacity
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