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COVID-19 UPDATE
Coronavirus Impact upon the European Retread Sector
Many of us will have read dystopian novels; Bradbury’s Fahrenheit 451, or Orwell’s 1984, would be the most well- known examples. However, few of us, especially in the west, would ever contemplate the reality of these books, they were, after all, just stories.
Yet, in 2020, here we are, sampling that very dystopian future depicted in so many novels and B-movie scripts. The current dystopia being experienced around the world is having an impact on all of our lives and
trades.
Tyre sales are down. That is almost a given. Private transport has been reduced to the bare essentials across Europe. In some places, not even that is allowed. So, the only tyres being used are on trucks making essential deliveries, emergency vehicles, and the vehicles of essential workers.
Retailers have been reducing hours, and some have closed. That results in fewer non- essential truck journeys – for example, in the UK, all bars,
market for both new and retread tyres.
At the outset of the crisis, we asked several manufacturers, particularly in Italy, how the restrictions were impacting their business. The feedback, at that time, from even the North of Italy, which was at the heart of the coronavirus outbreak, was that it was “business as normal”. Marangoni did comment that they would be looking at manufacturing abroad.
As the lockdown continued, tyre manufacturers across Europe and
feeling of civic duty accomplished, with a production team adjusted to the circumstances and restarting the production of all outstanding orders.
“Administrative work at the head office will continue on a teleworking basis, and all safety and hygiene measures indicated by the Portuguese General Health Directorate are continuing to be implemented, guaranteeing the safety of everyone at the production lines.
“During this period, there were always products available, and we have replied to all requests.”
On the 12th March Marangoni vowed to continue operations saying; “...our company’s activities in Italy are fundamental to support essential services such as goods and people transportation. For this reason, despite the complexity of a situation that is changing all the time, Marangoni is not stopping and is acting with commitment and determination to continue to produce...
“The company will do its best to continue to satisfy our customers’ needs while respecting the measures provided by the responsible authorities and complying with the framework of the more stringent measures issued by the Italian government. In order to protect as much as possible the health of our employees, we have arranged the “smart/agile working” for all the staff that can operate remotely.” However, in the ever-changing scenario, on 27th March, The Italian government ordered the cessation of all heavy industry to further contain the outbreak. Marangoni, like other larger manufacturers, has some engineering capability outside Italy. The company said in a press release; “Marangoni Retreading Systems announces that is organising, on a precautionary basis, to keep serving the market taking advantage of its international footprint and, in particular, of the plant located in Henstedt-Ulzburg, Germany.” The company questioned the need to close its Ferentino production facility, but at the time of going to press there had been no clarification from the Italian government. Marangoni
many, or most, of our businesses. Some are claiming that this will change the way the world works forever. We will, they argue, take more care of the environment. They cite the perceived boost to flora and fauna by the reduction in human industrial and commercial activity: This, they say, lights the path to a better future.
To be sure, the lack of aircraft in the skies, the reduction in road traffic, has made things quieter and the air is fresher. However, this is a respite amongst the horrid chaos that abounds. The real world is bursting at the seams to get back to normal. Against that background, how is the tyre retreading sector coping? It is difficult to assess a global response to that question. However, there will be some generalisations that will hold true in most markets. There will be variances, but the background will be the same wherever one
pubs and recreational facilities are closed, as are most non-food and non-pharmacy retail outlets. Consequentially, the distribution of goods to those closed outlets has tailed off to almost zero. Almost zero because some are managing to run online operations that keep some supplies moving.
Public transport is down. Bus services are reduced, often to “Sunday” service. In some cases, smaller local operators have opted to furlough staff under the UK government scheme, and all their bus movements have ceased.
As we are all aware air traffic has been decimated, so the movements of support vehicles at airports has been reduced to a trickle dealing with the odd passenger flight and the remaining freight traffic.
In all of this, the market has seen a considerable drop in tyre wear and tear and therefore in the
the USA slowed down or halted production. No manufacturer was immune. That also applied to those manufacturers retread operations. Given the mostly automated process of tyre manufacturing, this suggests that in addition to safety concerns for employees, manufacturers also saw a market downturn and there is a limit to the number of tyres being manufactured for stock. Those JIT operations would have no market and the bottleneck created by production with no sales would force a shutdown. Against this background, retreaders are facing a challenging market. Portuguese tread manufacturer EIB acted in the interests of its staff and closed down for a period. However, at the beginning of April, it was business as usual. Production restarted after its “voluntary quarantine” period.
Tiago Coutinho said in a press release: “We return with the
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