Page 61 - Retrading Business N103 2022-4
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COMPANY
Aleksandrs Cerkovnuks: “I would say that this is a golden age of retreading business that we haven’t seen for a long time.”
veloping rapidly,” Cerkovnuks said, adding that political tensions in the region make the future rather vague. “We have not suspended any of our projects, but on the other hand, we have not started the construction of our new production site yet. We hope to make a more clarity on the situation.”
REPORT
lowing the introduction of the anti-dumping duties with Vietnam and Thailand tyres, now retreads are well protected by a comfort- able €100 gap in comparison to the price of the cheapest new tyre.
ENERGY CRUNCH HURTS, BUT DOES NOT CRIPPLE
While the European Union stares into the abyss of a potentially catastrophic energy crisis, Cerkovnuks feels that the retreading in- dustry is doing noticeably well. According to him, the skyrocketing electricity costs were another factor behind the upward price rally in the European new tyre market this year. However, the costs rise for everyone, and retreaders are no exception.
In August, Baltread got an energy bill for €7,000. This corresponds to €10 per retreaded tyre, Cerkovnuks estimated.
“I would say that the energy costs jumped 2 or 3 times compared with the previous year. Tyre retreading is an energy-intensive busi- ness, so the energy market situation undoubtedly affects us,” he said, adding that thanks to the favourable situation in the retread- ing market, the company offset this factor by transferring addition- al costs to the price of retreads.
“Everything around us is getting more expensive, and our cus- tomers are not complaining. We are free to raise prices by 5% to 10%, and nobody would bargain,” Cerkovnuks said, adding that the difference with the market conjuncture of the pre-Covid times is striking. “Before, it was hard to raise our price even by €1.” On the other hand, the electricity price bounced back a little after the peak levels reached in August. Latvian retreaders hope this trend will continue.
The Russian invasion of Ukraine has not directly impacted the Lat- vian retreading companies, though the moods in the region leave a lot to be desired.
“I can’t say that this factor has any impact. However, the situation is troublesome. We are all following the news, watching things de-
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