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UNITED ARAB EMIRATES
New Tyre Prices Firming-Up and Bringing Back Customers says Emirates Tyre
Abu Dhabi’s Largest Retreader Expects Market to Bounce Back
Abu Dhabi based retreader Emirates Tyre Factory, has held onto its clientele of large fleets in the oil-rich Emirate. Fleet business accounts for a considerable proportion of its production, but what hampers it from hiking production further is a lack of cashflow in the market.
“Liquidity is a major issue as the government is not releasing funds, thereby disturbing the whole money cycle in the market,” commented
The plant retreads the majority of its tyres using the hot process with 700 tyres a month by the conventional method and 300 by the precure system. The company operates on a 10-tyre Rajmahaal autoclave.
Emirates Tyre used to import tread rubber from Midas, but with the list of credit customers surging, continuing with Midas has become difficult. “We shifted to Tolins about six months ago, sourcing both versions of rubber from the Ras
The majority of UAE retreaders anticipate the market will recover once petroleum prices firm up and revenue from the oil sector improves. The Emirate of Abu Dhabi is the biggest investor in
The site is equipped with two 7 and 10-tyre autoclaves and 7 vulcanisers for the hot curing. The company imports tread rubber from Sun Rubber in Malaysia and from Tolins’ local
Mohammad Afzal, General Manager, Emirates Tyre Factory
Mohammad Afzal, General Manager, Emirates Tyre Factory. The long credit practice of 90 days is now extended to six months to one year due to the lack of liquidity in the market, which only adds to the increasing woes of retreaders. Licensing is also emerging as a major issue, as the industry is not categorised as a sector engaged in recycling. “Authorities are creating new challenges and not allowing the smooth operation of the retread sites in the UAE,” he complained.
The retread plant started in 2010 as a part of the Al Sharafi Group of Companies, having its own fleet of 100 trucks, which is regarded as the backbone of its retread operation. “We also have good outside business from transport companies,” explained Afzal.
Al Khaimah site,” he said.
The company says it has experienced positivity in terms of volume with a surge in Chinese tyre prices. “Chinese tyre prices started firming up from AED 550 to AED 700, reigniting interest in retreading,” saisd Afzal.
The company used to charge about AED 550 for hot retreads, the same price as new imported tyres, but now the prices of new Chinese tyres are hardening, bringing back customers to retreaders. The new tyre prices have been increasing for the last eight months.
Interestingly, according to Afzal, fleets from neighbouring Iran and Iraq are visiting Abu Dhabi to buy casings, which has also contributed to a hike in casing prices.
infrastructure developments in the UAE, and once the global oil prices pick-up, the government is expected to announce new projects directly impacting the movement of the trucking sector. “It is difficult to operate in the prevailing scenario with overheads rising and margins vanishing, but we hope the market will bounce back and keep on investing in the retreading industry,” hoped Prasanth M K, Factory Manager, Saeed Al Zaabi Tyres.
The company first forayed into the retreading business in 2003 with precure retreads, but now operates the plant with both hot and cold processes, having expanded into the conventional process when demand for hot retreading started developing in 2012.
“We now retread around 1,100 tyres a month by the hot process and about 700 tyres by the precure system,” he informed.
production site.
It has become difficult for the company to balance its retread cost with that of the prevailing new Chinese tyre prices. “Recently, tread prices have increased, and with that now 80% of the Chinese tyre brands have almost the same price as that of our retread cost,” he argued.
The company has considerable retread volumes in Abu Dhabi and is regarded as the largest in the Emirate. “The price gap between retreads and new tyres is closing and has reduced to about AED 100 or below in both versions of retreading,” he said. UAE retreaders are also coping with perception issues, which has changed considerably in favour of Chinese tyres. “Customers used to complain about low-priced tyres, but now they have won the perception war as clients now consider them as a ‘Value for Money’ product.”
42 Retreading Business
Tyre Care Plans to Convert Retread Site into Truck Servicing Centre
With the decline in retread volumes in the UAE, retreaders are expanding into related rubber businesses. They are also looking
to implement innovative ideas to move on in the tough business environment. Abu Dhabi based Tyre Care Plus LLC is planning to