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COMPANY NEWS
Marangoni Reinforces Commitment to Independent Retreading with Key Strategic Announcements
In a month when the Marangoni Group announced three major strategic moves, namely the production agreement with motorsport tyre manufacture DMack in relation to the Rovereto factory, the global alliance with Vipal, and the acquisition of a majority shareholding in South African tread maker, Leader Tread, Retreading Business was able to secure an exclusive interview with Vittorio and Giuseppe Marangoni, Chairman and Vice-President respectively of the Italy-based retreading specialist, and we were delighted to find an overwhelmingly positive view on the future of retreading and a fascinating assessment of how the independent retreading industry can best position itself to achieve success in the future.
The clear message from Rovereto was that the global retreading market is changing fundamentally in a positive way and now offers a major opportunity for the independent retreading industry looking forward. The profitability boost provided by the introduction of Europe-wide tariffs on Chinese truck tyres is seen as a welcome coincidence, offering the industry valuable breathing space to organise itself, but the sources of main changes
operated from a position where the retreading process was important for economic reasons, and much of the industr y developed over time into a mass- production economy for reasons of economy of scale. In the end, however, the industr y was caught in a “perfect storm” and was dying because of the reduction in raw materials prices and the rise of the use + dispose economy. However, the future is different. In the current scenario where the planet has increasingly finite resources, and there is growing interest in the circular economy, the retreading industr y is ideally placed to benefit. We believe the crisis is now over and the market is stabilising.
“China is changing too,” he adds, “not because the price is high, but because there is a growing interest in reducing consumption and increasing service levels. As a result, those companies who ditched retreading in order to sell cheap Chinese tyres on price alone are now in trouble. On the other hand, those who stuck with retreading survived because of more loyal relationships with customers and can now look forward to the future with confidence.”
Central to Marangoni’s view of
to fleets, which, of course, is exactly what the larger retreaders are not geared up to do. “Logistics are becoming increasingly important,” says Vittorio Marangoni. “The growth of e-commerce has meant that service must be fast. We are seeing a growth in truck deliveries because trucks are flexible. “Services are also leveraging on technology. There is an increased need to use Big Data – pushing towards achieving an improved life cycle of the product. If you can measure performance, you can sell performance.
“In addition to this, we are experiencing a globalisation reversal process. Markets are closing again, and because retreading is local in its nature, that also helps. All these drivers were negative a few years ago, but now they’re positive once again.” For Marangoni, the key challenge is the retreader network, as this has been reduced significantly in recent years. However, the company sees new growth in the market coming from service companies, parts companies, from large fleets investing in retreading, as well as growth from existing retreaders who have survived the difficult years, and the return of some of those who exited the market.
All of this, of course, has implications for larger retread plants such as Marangoni’s Rovereto facility. These large plants have the economies of scale but are not able to provide the speed of service, which Marangoni believes will be necessary in the future. It is from here that the Idea of a Rovereto - based technology hub has emerged, and of which the recently announced agreement with DMack will become the first contract.
“Rovereto is a big factor y,” explains Vittorio Marangoni. “Historically it has been a multi- purpose factory, but because of restructuring within the Group, its activities have been reduced. Our concept is to share
economies in the manufacturing process, sharing central functions such as R&D, service, administration, logistics, space, energy, compounding etc. Our target is companies who want to manufacture in Europe now. This arrangement allows for this to be done quickly and at lower investment levels. We anticipate that this will bring back the volume in the factor y. The ultimate aim is to transform the production facilities here into a technology park, strengthening local industr y and developing the competence of the people. DMack is the first project under this concept, and we will start doing something soon – most likely in the next six months.” Sub-contracting manufacturing space to companies outside the retreading sector, however, is not the only area where the Rovereto plant can expect to see change. The company has made clear that it will continue to retread tyres in Rovereto, and there are reasons to expect some changes in the kind of tyres manufactured there.
To begin with, Marangoni have identified the need to look seriously at the production of 16” retreads, given the growth of local distribution within major conurbations by using smaller deliver y vans, otherwise known as the “last mile truck.” 16-inch tyres can be made using the cold process, points out Vittorio Marangoni.
Then there is the potential role of Marangoni as a co-ordination centre for its retreader network. Marangoni identifies its core business as being in pre-cured treads, but the Group has kept a number of core related activities, namely machiner y, compounds and direct retreading/services. This is important because it helps the company understand the overall market market and how the business model is changing. Vittorio Marangoni points out that the pressure on the retreading sector in recent years has provided a number of opportunities for manufacturers
Vittorio Marangoni
in the market, says the Group, are to be found elsewhere. One thing, the company emphasises, is that the market will not be the same as it was before.
Vittorio Marangoni explains; “The retreading industry for many years
the global retread market is the view that there will now be a trend towards a growth in smaller retreaders allied to major players such as Marangoni. This comes from the need to provide much more flexible and quicker service
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