Page 28 - Retrading Business N101 2022-02
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FUTURE PROSPECTS
So, let’s assume that retreads are safe and are a cost-effective alternative to im- ported, single-use tyres, how is this sec- tor going to grow in 2022 onwards?
“The Global Retread Tire Market stood at around USD10.02 billion in 2020 and is expected to register growth with a CAGR (compound annual growth rate) of around 3.76% by value in the forecast pe- riod (to 2027)... “Amongst all geographi- cal regions... most of the tire retreading owing to the presence of many commer- rapidly growing construction and infras- tructural activities.” (ResearchAndMar- kets.com)
In Malaysia, it is looking like we will see this situation play out, and here’s several reasons why.
Logistics costs are going up: shipping, wa- rehousing, fuel, vehicle costs, etc. are all rising or staying ‘very high’ compared to previous years, however the demand for logistics services is also setting new highs as we all get used to purchasing online during the pandemic and due to the new mega-projects that are getting underway across the country, that are feeding all
areas of the logistics supply chain. So, demand, and this is leading to operators looking at all and every way to cut costs. Tyres are often one of the top 4 expenses for a logistics business, so it’s right that road transport companies look at how they are using a valuable and depreciating asset to their business, in the same way they would any other. A retread strategy, mixed with a proper maintenance strate- gy here could help reduce tyre expenditu- re, thus making bottom-line savings. The only area of concern here is to make sure from a disreputable source that could jeopardise the road users’ safety.
PROSPECTS IN OTR AND LIGHT TRUCK SEGMENTS
There are two segments that are growing in terms of their consideration of using retread tyres, these are Off The Road mile logistics).
With the number of mega construction projects and the expansion of local agri- culture, Malaysia’s use of OTR tyres is increasing. As these organisations start to better understand the value of tyres, it’s clear that retreads will start to play a big role in this segment. Often the biggest
concern for OTR tyres is cuts, punctures, - tyre is damaged before it can use its full life. Even if retreading is purely used to repair a damaged tyre more effectively, it is a boost to the tyre operation of an OTR business. However, it’s often the case that some retread patterns - built speci- original tyre.
Last mile delivery is the largest growing space in land transport. As this segment continues to mature in Malaysia, opera- tors will start to look at options available to them when it comes to their tyre con- sumption. With the start/stop, hyper-ur- ban nature of the operation, and the constant sidewall damage experienced by this mode of operation, retreads (es- pecially wing treads) offer a perfect solu- tion, if the tyres can be produced effec- tively and costed correctly, locally. The sheer scale of this segment and its grow- th is a good thing for the retread market if it can capitalise on it. Again, the issue is, like for many other segments in Malaysia, can often make it seem unattractive to use retreads in their place.
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