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ITALY
Interview: Stefano Carloni, President of AIRP - Italian Tyre Retreaders Association
Retreading Business: Italy has been one of the European markets most affected by the import of cheap tyres from Asia. Could you please give us an update of sales within the truck retread sector in 2017 and a comparison with previous years?
Stefano Carloni: According to AIRP estimates, in 2016, Italian retreaders produced over 385,000 retreaded truck tyres and around 375,000 in 2017. However, the trend, during the last decade, was remarkably negative: the overall production volume in 2007 was 760,000 units, which means that within ten years the market suffered a 50% drop.
RB: How has the introduction of tariffs on Chinese new tyres impacted on retread sales?
SC: The impact was undoubtedly swift and positive, and already a month after the introduction of the provisional duties, the market showed signs of awakening. In fact, we saw an immediate increase, both in terms of demand and value, in the number of retreadable casings. Soon after even sales volumes followed this positive trend, and now many retreaders are finally experiencing a production rebound. We can safely say that these tariffs produced a complete trend reversal.
RB: What else can the industry do to improve the market for retreads?
SC: As things stand, we believe that tyre manufacturers are destined to play a key role: as market trends are finally looking up, it would be advisable to invest resolutely on technological innovation, improving the quality
of the goods offered on the market, making retreads even more competitive.
RB: Do you still expect a continuing consolidation in the number of retreaders in Italy in the short term, or do you now expect to see a slowdown in the consolidation? Is there even a chance for the market to attract new entrants?
SC: In the last five years, about 40 retreading companies were forced to shut down, and many more had to do the same in previous years, so we believe we have reached the lowest number of active operators in years. It is difficult to predict whether other companies will come onto the market, in the meantime those that have been able to stay in business until now will likely experience a phase of business stabilisation and growth.
RB: Where do you expect any future growth to be – mould cure or precure?
SC: Given that we do not consider either one of these methods superior to the other, we believe pre-cure retreads will grow significantly quicker as, in our opinion, proximity retreading should be preferred and encouraged: so we are looking at small and medium-sized enterprises who will likely benefit the most from pre-cure methods in order to best meet the needs of the local markets. In fact, operating on a local scale, the retreading industr y can become the perfect example of a circular and sustainable economy.
RB: Is growth most likely to come from premium retreads or from the cheaper end of the spectrum?
SC: Our hope is that the expected market growth will be mainly driven by premium products, and if we are truly aiming for a circular economy, then tyres must guarantee one or more life cycles after being used for the first time as new.
We should not neglect to consider, though, that in recent years, the number of quality casings available has been greatly impoverished. Cheaper casings, even if retreadable, require materials and procedures related to their scarce mileage potential.
RB: What other trends do you see in the retreading sector?
SC: Assuming that, in the next few years, the European industr y as a whole will increasingly move towards a circular business
model, as far as the retreading industry is concerned a casing certification system will have to be implemented. As we speak, this key element is missing, but we firmly believe this represents a solid foundation for the future of our industry, and act as a stimulant also for the competitiveness of new tyres.
RB: How will AIRP interact with other retread associations in different countries in the future? SC: The retread business, of course, has some local peculiarities, but the issues we contend with on a daily basis are in all respects European, and as such they must be addressed. We have taken part in many activities alongside BIPAVER in the last few years, and we are trying to tighten this synergy even more, in view of the future technical and regulatory challenges awaiting the entire retread sector.
RB: You are currently involved in a market study covering Retreads in the Circular Economy. Could you please tell us some more about this, and explain what you expect to achieve with it?
SC: We are collaborating with a Study Centre to alert Italian legislators on issues related to a circular economy model. Our goal is to promote the use of retreads through specific environmental taxation policies.
RB: What are the key aims for AIRP in the next five years?
SC: We are currently working on many “tables” in our effort to support the retread industry, in addition to a general commitment towards, as already mentioned, promoting a circular business model, and a certification for retreadable casings.
Another important issue relates to guaranteeing a greater standardisation in the dimensions of the casings. Often the actual size on which the retreaders have to work are significantly different from the nominal size. This will be of particular interest for car retreads. Manufacturers, in fact, often rely on environmentally sustainable design (eco-design), therefore, a correct and consistent sizing will go a long way in promoting the re-use of the casings. In addition, besides tax policies aimed at facilitating the use of retreads, we believe in working towards a greater traceability of the tyres, in order to help the retread sector as well as promoting a correct and efficient disposal of ELTs. Furthermore, since retreads, after years in which operators have had to really struggle to stay in business, are still a relatively "weak" product, we believe that an excessively burdensome regulator y and bureaucratic framework at European level should be avoided for the time being.
RB: What are the key achievements of the Association in the last five years?
SC: First of all, we cannot neglect to mention the introduction of anti-dumping duties, which is undoubtedly the result of a collective work made by the entire European industry, but one in which AIRP was actively involved right from the beginning and offered a contribution that in our opinion was far from irrelevant. Back at home, AIRP succeeded in having new and recapped tyres, as well as materials needed for retreading, listed among the goods for which the responsibility for failing to pay the VAT is extended to the buyer. In other words, in the event that the seller fails to pay the tax, the buyer will be called to answer for it. Still on the subject of legality, AIRP has created, with the help of other associations, the first whistle- blowing platform for reporting
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