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MALAYSIA
Deauto Bet on Diversification Strategy to Protect Against Market Volatility
the south and east coast of Malaysia better.”
As of today, Deauto Recycle & Retread Industry Sdn Bhd are producing between 1,500 to 1,800 pre-cure retreads per month in the TBR and light truck segments for both on and off-road applications for long and short haul journeys. This output presently covers Central, Northern and the East Coast of Peninsula Malaysia. Choon Seng explains, “we fluctuate on a monthly basis between 1,500 and 1,800 retreads. This represents approximately 60% of our production capacity, thus showing our room to grow using the resources we already have available. We are already
for 16 and 12 tyres respectively.
Furthermore, Choon Seng disclosed that the casings that supply the production are about ‘60% stock retreads and the remaining 40% customer- owned casings’. These casings are mostly well-known brands such as Bridgestone, Toyo and Yokohama, imported from Japan due to the high levels of retreadability.
“We want to see our volume gradually increase so that we can plan accordingly. We are currently renting out additional space in Malaysia which is sizeably larger than our facilities at this point in time. Therefore, if demand surges we will be able to react
Lim Choon Seng, Managing Director for Deauto Recycle & Retread Indsutry Sdn Bhd
Deauto Recycle & Retread Industry Sdn Bhd has committed itself to a strategy of diversification as the retread environment continues to prove to be a complex battleground. Managing Director Dato Lim Choon Seng explained, “we are continuously looking for other types of business to spread the risk from our retread operation. For example, we have been investigating the viability of the property market.
“The difficulty with retreading in Malaysia for operators like ourselves is the price war amongst retreaders in Malaysia that tends to come from many end users preferring to purchase a cheap new tyre on price.”
Deauto Recycle & Retread Industry Sdn Bhd is a retreading and recycling operation located in Telok Panglima Garang in Selangor. The business had been active for five years when Lim Choon Seng started the retread factory
following changes in the casing import licensing.
“I worked for 15 years as a casings wholesaler and 5 years with Kit Loong (Commercial Tyre), but once the import licensing changed regarding the importation of casings, we were obliged by the regulations to have our own factory. This led to the initiation of our retread business,” Choon Seng stated. In the last five years, Deauto has developed into an operation that boasts 21 members of staff with 13 working in production, 4 in the office and the final 4 fulfilling duties in logistics and marketing.
“We have a team of 21 workers today and are planning to add to that with two drivers,” explained Choon Seng. “The plan is for these drivers to operate the two trucks we will be buying to collect stock retreads and customer-owned casings. This is all with the objective of aiding us to cover
Deauto Recycle & Retread Industry Sdn Bhd are producing between 1,500 to 1,800 of precure TBR retreads per month
22 Retreading Business
ver y strong in the north and West Malaysia, but undoubtedly would like to strengthen our position.”
This production is supported by one fourteen-hour shift that begins at 6am and finishes at 8pm that sees Deauto utilise two autoclaves with capacity
appropriately and grow.”
The products produced by Deauto are enabled by three separate tread manufacturers: Maxrubber, Eversafe and Sun Rubber with the majority of the production being Eversafe.
“We normally recommend the pattern that works best for that