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UKRAINE
Ringtread is expensive but quality ensures customers for Yashina
An overview of the Yashina production line
to 95% of all tyres with the Marangoni Ringtread system. This means that our product is premium. There are companies on the market offering retreading services performed with cheaper materials at lower price. There is no any other retreading plant in Ukraine that could offer high performance retreaded tyres with the expected mileage above 300,000 km,” Grishenko said. “In the premium segment, it is harder to convince the customer to try your product, but once he tries he doesn’t want anything else, including Chinese tyres or tyres from any other retreaders”. Despite this, Grishenko admitted that it is “absolutely uncomfortable” to
Ringtread is expensive but quality ensures customers for Yashina
do retreading business in
Ukraine these days. “It is a rather hard business now,” Grishenko said, confirming that it became a way harder in the past few years. “We believe that the sustainable growth in the retreading market would be possible only in case there is an overall growth of sales
on the domestic tyre market. In Ukraine we have seen only a moderate increase in sales on the market, limited to several per cent in the past few years”.
And just as in all other European markets, in Ukraine there is an overwhelming import of Chinese tyres. This factor puts an additional pressure on business. “Russia introduced anti-dumping duties against Chinese tyres four years ago, the US a bit earlier, the European Union last year. So, there is a question where all the quantities, the supply of which was limited, could be supplied to. Some tyre plants in China were shut down, but to some extent much of this excess production ended up in Ukraine. We have seen an increase in imports of cheap Chinese tyres in the past few years,” Grishenko said.
As of today, all new tyres in Ukraine, no matter the country of origin, are subjected to an import duty of 7%. This is clearly not enough to curb imports from China.
With no doubt, the economical
and political crisis that arose in Ukraine in 2014 has impacted the retreading industry. “There is a ver y direct impact. Transport is a cardiovascular system of the countr y, and when supplies are shrinking, the costs that the companies could bear with tyre retreading go down as well. The general economic situation directly affects transport business, and hampers companies in related branches,” Grishenko noted.
Yashina is lucky to be located in Dnipropetrovsk Oblast in central Ukraine. According to Grishenko it is actually western retreaders that were impacted by the crisis especially hard.
“Western Ukraine borders with Europe, and there is a duty-free import of some goods, like retreaded tyres. In addition, the problem is that young people from Western Ukraine are
country,” Grishenko said. Nevertheless, retreaders in Ukraine are pretty sure that the current challenges are temporar y and the positive changes in the industr y are already on the way. “The run of bad luck cannot last forever. It should be replaced with bright days someday,” Grishenko said.
For example, some opportunities for retreading business in Ukraine could be linked with export supplies to the European Union. Grishenko explained that so-far he had not heard that any exports had really been taking place, but these days it could be of more interest to the Ukrainian retreaders given the anti- dumping duties imposed by the European Union against Chinese tyres.
“We see now that there is an upward trend on the European retreading market. In addition,
moving away from the country, searching for the better job opportunities in the European Union. We have a visa-free regime with the European Union and it is way easier to find a job there, than it was two years ago”. According to Grishenko, in the Ukraine it is hard to find a job with a wage close to Eur1500, while in Poland it is much easier. As a result, in order to keep the staff, the companies located in the Western regions have to raise salaries, hence sacrificing their margins. This problem is common for modern Ukraine, although in Western regions immigration is a particularly concerning trend for the local business.
“As of today, every business in Ukraine experiences problems with human resources. There is a shortage of labour force in the
there is a higher demand for new European tyres. This means that in the coming few years we could expect that there would be more casings of the appropriate quality. In the next one or two years there could be good chances to establish exports of retreaded tyres to Europe,” Grishenko said.
Although, in theory, this direction could be interesting for some retreaders, Grishenko said that it is not likely that Yashina would be among them. The company is located away from the border, sourcing both casings and raw materials on the European market, and logistics costs make export supplies not ver y attractive.
“We hope for better. In the end, there needs to be an improvement on the market,” Grishenko said.
44 Retreading Business