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ESTONIA
people who are not quite happy, but we can say that 95% of our customers are satisfied with our product and ready to take more. This is the most important thing. In this regard, we believe that there still will be the demand for
retreaded passenger tyres in our part of the world, unless some ‘eternal tyre’ is invented, which is very unlikely,” Gerasimov concluded.
performance of the local retreaders exceeds the demand,” Suurkuusk claimed.
“The industry feels some support from export operations, although it is not easy to sell retreaded tyres
the price for a Chinese truck tyre was close to Eur150. Initially almost ever yone was tr ying to purchase Chinese tyres. As the result, the share of casings appropriate for retreading now is not that high.
Quality is the key to the future at Eurovia
Eurovia M: Living in a Changing Environment
Being the oldest retreader in Estonia, over the past two decades Eurovia M got through all the ups and downs of the domestic market, which, of note, there were quite a few. The company was affected with the recent crisis in the industry in the same way all other retreaders in Europe were, but there are hopes that some improvements may be already on the way, according to Juri Suurkuusk, technical director of the plant.
Eurovia M was established in 1995 with support from Marangoni Retreading Systems, at the time when it was still named Ellerbrock, Juri Suurkuusk recalled.
“Our plant was visited by experts from Germany who installed equipment and trained our stuff, and until 2011 we were working with the Ellerbrock tread strip. In 2008, there was a global financial
tensions started growing between Russia and the European Union. The first economic sanctions introduced at that time brought turbulence in the national transport industr y.
“In Estonia we had two types of transport companies. The first was focused on transporting various goods to and from Scandinavia and Europe. They are still doing relatively well. The second is those companies that were handling cargo flows to and from Russia. In the past few years, their business has been severely affected,” Suurkuusk explained.
This factor has also brought a negative impact on some retreaders in Estonia. Eurovia M was pushed to significantly reduce the production performance. In better times, there were two shifts at the plant, retreading up to 10,000 tyres
from Estonia abroad. We have been trying to enter Finnish market, but there are 27 retreaders operating in that country
and the competition is fierce there. In 2010 and 2011 we were retreading tyres for a Swedish customer, but this partnership did not last for long,” Suurkuusk said.
Adjusting costs
In the current conditions on the market, the production costs in the retreading industr y are a crucial factor. Eurovia M has rather low costs, because the company owns the building and the land where it stands. Unlikely many other retreaders the company has no rent to pay, and this supports the overall business profitability.
The other factor is casings. In the past few years, Eurovia M has been purchasing casings only on the domestic market. In Estonia retreaders have to pay an ecological fee when they are importing casings even from some other European Union member states. There is a limited supply of high-quality casings in Estonia, but Eurovia M has managed to source them domestically.
“There is a problem in Estonia with poor quality casings, appropriate only for going to scrap. People are buying them online in the Internet, and in the end they are being accumulated at the landfills and nobody knows what to do with them,” Suurkuusk said.
This problem is believed to have been aggravated in recent years with the inflow of Chinese tyres. According to Suurkuusk, some time ago the price for a retreaded tyre of Eurovia was close to Eur160, while
“Now the European Union has introduced new import duties against the Chinese truck tyres. As the result, the prices for Chinese tyres increased to Eur250...260, although some warehouse stocks still can be found on the market at the old price,” Jurij said.
As a result, at the moment Estonia sees an inflow of tyres from the Eurasia Economy Union, primarily from Russia and Belarus. In 2018, the sales of K ama, Cordiant and Belshina and some other brands were growing in Estonia.
“Now the Russian tyres are cheaper compared to Chinese, and ever yone who wants cheap product purchases Russian tyres. We also retread Russian casings, although some brands have certain problems. For example, Cordiant has a rather unstable sidewall, and we had to spend some time figuring out how to solve this issue. Despite this, the quality of the Russian tyres is better than the Chinese tyres,” Suurkuusk said.
It is clear that the company has no need to import casings because of the low production volumes. According to Suurkuusk, 80% of the tyres Eurovia M retreads as a service and only 20% on its own casings. This means that the plant needs to find 600 to 800 casings per year on the domestic market. So far, the company is able to cope with this task, but with the projected growth in production, the need in imported casings would arise one way or another.
“On the other hand, we are not rushing to change our production technology. For example, one question is in tread width. Unlike some other companies, we prefer to not use narrow treads. So. if we
Eurovia was one of the first Estonian retreaders set up with the support of Marangoni
crisis and the prices for everything were on the rise. We had to adjust our business under the new requirements of our customers – local transport companies – as at that time they had a lack of funding. So, in 2011we partly switched to using Galgo tread strip,” Juri said.
For centuries Estonia has been an important transit country between Europe and Russia. Since independence, it was believed that the two most important sectors of the national economy were banking and the transport industry. That was the case until 2014, when political
per year. Now only one small shift has left, and the
production performance is ranging between 3,000 and 4,000 tyres per year. This fall in production is a common picture for the entire retreading industr y in Estonia, according to Suurkuusk.
“I came into this business in 2003 and at that time there were estimates that the overall size of the retreading market in Estonia was close to 40,000 tyres. There were 4 truck tyre retreaders in Estonia, now our number increased to 7. Since that time, the domestic market has shrunk, and the overall production
50 Retreading Business