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MALAYSIA
TRMAM Analyses the Opportunities and Challenges for the Malaysian Retreading Sector
Mohd. Azhar Mohd. Wazir is the president of TRMAM, the Tyre Retreading Manufacturers Association of Malaysia, as well as general manager of Kit Loong Tire Management. We managed to catch up with him recently to talk about the latest developments in the Malaysian retread sector and to analyse how the industry in the South-East Asian country was dealing with the challenges posed by the pandemic.
According to Wazir, the Malaysian retreading industry has generally had a difficult time of it during the Covid-19 crisis, especially during the first MCO (Movement Control Order) when retreaders were unable to operate. This caused substantial cash flow
an opportunity.”
According to Azhar, his own company Kit Loong Tyre Management is currently making the most of these opportunities by sitting down with transporters to help them reduce tyre costs, and indeed, some are achieving this. “Transporters are being very selective, though,” says Azhar “Clients are taking their time to check the performance of retreads, although this is counteracted by the fact that Chinese tyre prices are continuing to increase due to materials costs. We need to make the most of opportunities in this scenario.” One of the key issues facing retreaders in Malaysia at the moment is the difficulty of
Azhar. “Reputable ones come with the e-mark too. At first an attempt was made to stop DOT-only tyres from entering Malaysia, but the international ministr y did do that. There is currently a proposal under review to insist on tyres manufactured to MS1394, which is equivalent to the EC standard. However, there is a shortage of
educational projects. Most important is the development of the new MS 224 Standard, which is in its final stages. Once done, the Association is looking at
carr ying out educational campaigns to help hauliers know how to identify when tyres are legal and when they are not.
“We are working with government
issues for many operators, and despite a recovery following the second MCO, productivity remained affected due to government restrictions. Retreaders were also affected by increased raw materials and casing costs as well as by a general reduction in traffic movements, which has caused an overall slowdown in the market. Now, with cases on the rise, and a new lockdown implemented, hopes rest on a ramping up of the vaccination programme.
“All of these factors have meant that the retreading industry is seriously fighting at the moment,” says Azhar. “The balance between opportunities and challenges is currently mixed. There are a lot of Chinese new tyres coming into the market, but there is a counter- opportunity arising from the fact that imports are expensive due to shipment costs. Transporters are looking at reducing costs, so some transporters are looking more closely at retreading – so there is
recruiting enough workers to work in retread plants. With the Malaysian Government looking to reduce the number of foreign workers, retreaders have little choice but to recruit locally. However, according to Azhar, despite some government incentives and despite high enemployment, most Malaysians are reluctant to take up hot, heavy duty work in retread plants, preferring jobs in service industries. This, says Azhar, leaves retreaders with no option but to increase salaries. “The industry needs to promote itself more heavily through social media etc. to persuade local workers to join retreading companies, he says. Another key challenge for Malaysian retreaders, of course, remains the difficulties caused by the influx of cheap Chinese new tyres, an issue which has been discussed at government level in Malaysia.
“Cheap Chinese tyres often come with the DOT standard only,” says
casings because of this, which has created the need to need to import them. However, there is a 30% tariff on casings, whereas the tariff on new tyres has been reduced to 5%, so there is a big advantage for new tyres. In
on how to curb illegal tyres in the market,” says Azhar. “We also want to do a lot of technical sharing. We want to do seminars but cannot do this at the moment because of Covid restrictions.
K ayel Tyre Retread recently
14 Retreading Business
addition, casings are getting more expensive because of the demand from new markets like South Africa as well as increased demand from Europe.
In terms of work programmes, TRMAM is currently engaged in a number of technical and
became the first retreader in Malaysia to achieve ECE 109 Standard,” he added. “if more of the industry can get to this level then there are opportunities for the whole industry to step up and export to other countries.”