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KENYA
Indian Material and Equipment Suppliers Dominate Kenyan Market
remains the biggest market among all the East African countries. Commenting on the current market scenario, Shah added; “These days the market is quiet as now we import two containers each quarter.”
Rubber Products has been active in the rubber trading business from last 35 years and used to offer camelback as well. However, with demand for conventional rubber dropping, the company has shifted towards the precure process.
Interestingly, the distribution firm says it finds it cheaper to import rubber from India over managing a fully-fledged tread rubber operation in Kenya. “Despite this, we produce bonding gum in Nairobi as it has an expiry date,” he explained.
The Kenyan retreading industr y has been hit by the twin blows of low priced tyre imports as well as the long haulage trailer sector crisis due to construction of Nairobi- Mombasa standard gauge railway (SGR) network.
“Previously, the retread sector was affected only by the cheap tyre imports, but industr y has learned to
cope with that challenge by importing competitive tread rubber from India. But now the whole long-distance trailer business is in
Manish P Shah of Rubber Products Ltd.
Kenya remains one of the biggest retread markets in East Africa, controlled almost 100% by the Indian settlers. Interestingly, not only are the owners of retreading businesses Indians who settled in Kenya generations ago, but most of the rubber compound and equipment is also supplied by Indian firms.
Elgi, which has been present with its own production facility in Nairobi for more than two decades, is among the key suppliers of rubber compound and equipment. Meanwhile, other Indian compounds are also available including Midas, High Tech, Forbros etc. besides Malaysian brands such as Goodway, Suntex and Eversafe and the Brazilian brand, Vipal.
On the equipment side, the Coimbatore based retread machinery makers are the major machinery suppliers i.e Elgi, Rajmahaal, Glisten and Gemini.
It seems the Kenyan retread industry has learned to cope with the problem of low-priced imported tyres as retreaders have started importing tread rubber at highly competitive prices from India to beat the challenge of cheap tyres. At the same time, others are focusing on improving efficiency to save on overheads.
On the other hand, however, the presence of the Michelin Recamic process in the market indicates there is still a small segment of consumers willing to pay more for quality retreads.
The liquidity crunch is another major factor that is subduing
market sentiments at the moment. The cash crunch was triggered when the Kenyan government demonetised high value notes leading to a shortage of cash in the market. Industry is of the view that the market will improve with ease in terms of cash flow after October, when old notes are completely out of circulation and the new currency is in full flow.
The Long-distance Standard Gauge Railway (SGR) operating between Nairobi and the port city of Mombasa has posed the latest challenge to the transport and retread industry for the last couple of years. A distance of almost 500 km was covered largely by trailers to bring supplies from the port earlier, but now all shipments are moved by the SGR in between both cities. Now imports are cleared at the Internal Container Depot (ICD) in Nairobi, which has impacted the majority of long-haul business in Kenya, with long-distance fleets going out of business.
Though no authoritative figures are available, the impact is widespread among both transporters and retreaders as now trips are shortened and the number of tyres coming for retreading has dropped. But all kudos to the India entrepreneurs as despite the challenges, they continue to survive and are running the show with hopes of a market revival.
crisis as container movements from Mombasa to Nairobi are only allowed through SGR, which adversely impacts the retreading sector,” he argued. Long haulage trailers remain the largest segment that retread tyres in Kenya.
Fine Tread Treads Cautiously
With the change in market scenario, Kenyan retreaders are hoping the market will stabilise or adjust to the changing economic conditions in the near future and prefer to maintain low volumes until the market turns positive.
“We believe the slowdown is not
been in the business of retreading, new tyres, rims and patches on the automotive side for the last two decades.
In the meantime, Fine Tread is now a diversified firm after having entered into new verticals like the manufacturing of industrial oil and
Baljinder Singh Randhawa of Fine Tread & Allied Industries Ltd .
Rubber Products Ltd:
Kenya Remains the Biggest
Market for Rubber Products
in East Africa
Indian equipment and tread rubber brands are strengthening their foothold in the Kenyan retreading industry. Some of the locally based companies engaged in the rubber related business are also into trading and distribution of tread rubber sourced from India. Nairobi based Rubber Products Limited is importing tread rubber and distributing it in the East African market.
Rubber Products Limited operates a partial production facility in the Kenyan Capital. “We import masterbatches from India and do
the final mixing and calendaring in our facility,” said Manish P Shah of Rubber Products Limited. The company also produces bonding gum at the same site for distribution along with tread rubber. The company imports a container of 18.5 tons each month from the Indian brand Narmada and produces around 8 tons of bonding gum in a month. “We are selling around 200 tons of tread rubber along with about 100 tons of bonding gum annually in the markets of Kenya, Uganda, Tanzania and Rwanda,” said Shah. Kenya
merely confined to the retreading business but to every sector of the industry, it is actually a global phenomenon and Kenya is no exception,” thinks Baljinder Singh Randhawa of Fine Tread & Allied Industries Ltd. The company has
pneumatic instruments in the last few years.
“Currently, we are retreading 300 tyres per month, using the Malaysian tread rubber brand Eversafe. We have been both loyal to each other all these years as our
32 Retreading Business