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INTERVIEW
Indian Retread Sector in Survival Mode but Future Prospects are Good
Despite the current difficulties in the market, the overriding economic indicators suggest good prospects for the retreading market going forward. The Indian stock market is at record highs, and some sectors booming such as consumer goods, home appliances etc. Eventually, the transport sector has to pick up, thinks Sanghi, and retreading has to grow with it.
players. “They are still there in the background, though,” he warns. “The start-up costs for this kind of operator is extremely low, so they are able to shut down for a few months and then start up again. They don’t actually leave the market.” With regards to the development of the newly formed trade association, Sanghi outlined some of the difficulties that the newly formed body is
facing in expanding its coverage and the services it offers to members. Although most of the major players in the Indian market are on board, overall membership is still quite low.
“The smaller retreaders are simply not interested,” said Sanghi. “We are therefore restricting our activities to promoting positive messages such as ‘retreading is safe’, ‘retreading will save you money’ etc. Of course, if a legislative issue comes up,
we try and deal with it, but overall, our work programme is focused on promotion and helping people answer the question ‘Are you getting a quality retread or not?’ There was talk of setting up a Quality Standard, but this is very much on paper at the moment. At this stage we are unable to say if or when this will happen or how it could be implemented if it does.”
The Indian retreading industry is currently in survival mode following the severe impact of the Covid-19 pandemic, and the nascent trade association which represents the retreading sector in the South Asian country is, for the time being,
focusing on positive PR messages rather than
pushing membership
growth and an
expansion in its
activities. Despite this, if
you look behind the
current crisis, the
prospects for Indian retreading, especially the organised sector, are
good. This was the
message given by Karun Sanghi, the Managing
Director of Indian
retreader Tyresoles and President of the Indian Retreaders Association in a recent exclusive interview with Retreading Business.
The retreading industry in India suffered the impact of a very severe lockdown, with everything being closed down from mid-March to mid-May 2020. According to Sanghi, by the end of May business was still only 10-15% of what it was the previous year and did not recover to the previous year’s levels until September/October
time.
“People are just trying to get by,” said Sanghi. “As a result of the pandemic, money that was out in the market got stuck, and bus operators haven’t really re- started their business even now,
so retreaders doing business with bus operators have experienced difficulty in getting paid. The big difference right now is that business is being done without credit. Nobody wants more risk. There is still a great deal of uncertainty in the market, because despite the recover in September and October, December was much slower, so we are currently operating from month to month.”
“In addition, the Indian government has pretty much blocked all imported tyres,” he points out. “Chinese tyres and even high-end car tyres are difficult to import. Supply is disrupted, and so that offers a great opportunity to retreaders.” In addition to the above, Sanghi points to the positive impact of the introduction of GST tax a couple of years ago and to the fact that Covid has resulted in the closure of many smaller