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ESTONIA
Tiit Kõmper, director of Vevid
Estonian transport industry remain rather complicated, according to Piller. Many transport companies have closed over the recent years, while those that remain “are living on a shoestring”, he said.
In 2018, Veguma opened its own tyre fitting centre and established an internal logistics division. The company runs a transport fleet that collects casings from customers all over Estonia and delivers them their retreaded tyres. This provides some additional support to the entire business structure.
With no doubt some support to the entire retreading industry came from the anti-dumping duties against Chinese truck tyres introduced this year in the European Union. As the result, the supply of Chinese tyres in 2018 was slightly down, and demand for retreaded tyres was slightly up. “Basically, we all knew that the anti- dumping duties would not decrease the number of cheap tyres on our market. Those flows that previously were imported from China now come from Taiwan, Indonesia and some other directions. There was some turbulence on the market for a few months, but then everything calmed down,” Piller said.
In Russia, anti-dumping duties against Chinese tyres were introduced in 2015. According to Kalinkin, there was not any noticeable effect from that step, though Veguma has been seen its sales on the Russian market steadily growing over the past few years in all segments.
“In Russia, the main problem is stereotyping against the retreaded
tyres. In addition, they have almost no casings appropriate for retreading. These are good things for us, because sometimes when selling the tread strips to a retreading plant we also sell retreaded tyres in certain sizes,” Kalinkin explained.
Although it is not easy to import anything into Russia, there has been no negative impact on the business from sanctions, Kalinkin said.
“We are producing tread strips, but we are also supplying our clients with a broad range of materials they may need in tyre retreading. Just recently, we were trying to export a cord from a Polish producer and it had been blocked in customs for two weeks. We are in negotiations with the Russian custom service, but we are still not certain that the custom clearance of that cord will ever happen,” Kalinkin admitted. “Nevertheless, in 2018 high season we were overloaded with orders. This is a very good sign. We managed to execute all orders in time, though we are already thinking about expanding our production capacities, anticipating even more orders in the next year,” Piller said. “As for the tyre retreading, in some periods of 2018 we were retreading 100 to 120 truck tyres per shift. We have an ability to expand this figure to 140 tyres per shift, through rather small investments, but so-far we see no sense in that step. It is simply not justified because we can simply accumulate some products in the warehouse and meet the rise in demand in high season with warehouse stocks,” Sedlov said.
for nearly two years since 2016, but this year [2018] we started evidencing some upward movement on the market,” Kõmper said.
To some extent, the
recession has been
provoked by Chinese
tyres that
overwhelmed the
European market. On
the other, retreaders in Estonia were damaged less than their peers in the southern countries.
“We are very lucky that we have two separate seasons. We are making winter treads in large quantities. They are in very high demand here on the domestic market, and, of course, we are selling them to Finland too, and this helps. In fact, this saves us,” Kõmper admitted.
As long as Chinese tyres are not competitive on winter roads, and they never have been, the “northern retreaders” manage to stay afloat. Kõmper said that his company is operating “bit by bit”, slowly and steadily investing in some modernisation and basically is doing well.
So far, so good
In a similar way, Vevid is slowly and steadily improving the production process. According to Kõmper, in his opinion, the most important elements of the technological line are the buffing and building machines, both supplied by Matteuzzi.
“We purchased these new machines this summer. That was an important development for our production line,” Kõmper said. Although the company doesn’t complain about the condition of its equipment, Kõmper said that there are two autoclaves on the plant, and one is truly old. Kõmper continued that the other one was purchased around 6 years ago from Akar Makina. Both autoclaves designed to accept around 18 truck tyres.
Vevid is believed to be one of the top three biggest truck tyre retreaders in Estonia. However, it is hard to compare the current figures with the performance of the previous years.
“There are two different things – how many tyres we retread and how many retreaded tyres we manage to sell. In 2018, we sold around 9,500 retreaded tyres. When the domestic retreading
market was at its peak, this figure was slightly above 10,000 retreaded tyres per year”, Kõmper said.
The fact is Vevid was not affected by the current market crisis as severely as some other retreaders. Life may even come back to normal thanks to the new anti-dumping duties introduced against the Chinese tyres by the European Union. According to Kõmper this was one of the factors that drove the company to invest into new buffing and building machines.
“To be honest, so far we didn’t notice any big improvements on the market. The first half of 2018 saw no changes at all. There were old stocks of imported tyres. It is possible that there are fewer of these tyres on the market nowadays, but have not felt any strong shift so far,” Kõmper said. Nevertheless, the overall production performance this year is going to be about 10% to 20% higher, compared to the previous year.
Challenges to face
In theory, Vevid could expand the production further, but there are several obstacles in the way. One very important challenge that is common for the entire retreading industry in Estonia is a shortage of some trained staff.
“The wages are growing all over Estonia, and the problem with finding qualified people is really strong”, according to Kõmper.
This is a common picture for Baltic countries, as many young men over the past years left the country looking for better job opportunities in Western Europe. As the result, the competition between employers on the labour-market is truly fierce, and those few young men that stayed usually have better job options rather than working at any kind of a plant.
These trends are seen in Estonia, although the demographic and immigration situation here is slightly better than in Latvia and Lithuania.
On the other hand, when the first
Vevid: Northern Style
The story of Estonian truck tyre retreader Vevid is very much similar to the stories of all others retreaders in the Baltic region. Being founded in 1995, the company has enjoyed rising demand for retreading services on the domestic and in
some neighbouring markets for almost two decades. Business was growing, but then the tables turned as the recession came to the industry, according to Tiit Kõmper, director of Vevid.
“We have seen a downward trend
54 Retreading Business