Late last year, the European Commission began investigating new truck and bus tyres from China and their impact on European retread sales. This led the EC to implement regulation that requires new and retreaded truck tyres imported from China to be registered. If these imported tyres are dumped, Anti-Dumping Duty or countervailing duties may be applied retrospectively.
If the retrospective duty is implemented as expected later this year, this will be particularly welcomed by European tyre retreaders, who have been hit hard in recent years by the flood of China-made, single-use truck and bus tyres.
“The various industry associations have had to work for about three years to put a case together,” explains Mike Wilson, director of trade body, the Retread Manufacturers Association (RMA). “Initially the EC said that premium new tyre sales were unaffected, so proposed no action. When we resubmitted, detailing how the market segments interacted, this clearly indicated that Chinese imports and European retreads were competing segments.”
In the UK, the number of retreaded tyres produced has fallen from around a million in 2014 to 600,000 last year, at a time when the overall CV tyre market has grown substantially to around two million units annually thanks to a rise in low-cost imports.
“The major tyre companies spend heavily on research and development to develop a truck tyre that performs at the highest level,” says Wilson. “I think it’s a wasted opportunity not to use that investment to its full potential. I believe that for government agencies and in areas where the government has influence, a commitment to recycling or reuse should be at the forefront when customers are tendering, rather than adopting a ‘lowest price wins’ approach. In Italy as an example, local authorities must have to have a percentage of retreads on their vehicles. I’m not sure the UK retread industry feels that a race to the bottom is the best way forward.”
Quality continues to rise thanks to both advanced equipment and structural changes in the industry. In the past two decades, major advances in automation, precision and quality control have been applied in new tyre manufacturing and those innovations have fed down into retreading machinery, too.
VMI Group is Europe’s largest supplier of tyre-making equipment. It produces extruders that are used in ‘cold’ retreading, whereby a pre-cured tread (PCT) strip is glued to a buffed casing. PCT retreading accounts for about half of the European market. VMI’s technology smears a very thin layer of cushion gum to the casing, flattening the surface like butter on a slice of bread to minimise the number of trapped air pockets when the PCT goes on top. In VMI’s latest innovation, the extruder is combined with a PCT applicator to create the RETRAX ‘builder’. A camera captures the position and width of the buffed surface, sets the extruder and aligns the PCT applicator table accordingly; the camera and associated software then measure the tyre’s circumference and calculate the correct stretch onto which the PCT is to be applied in order to get a perfect splice for improved uniformity.
Image BTMA/RMA
The advent of higher-technology equipment has gone hand-in-hand with a shift to fewer, larger production facilities to make it easier for operators to get a return on their investment. Where once, numerous smaller retreading shops dominated the industry in the UK, it’s now firmly in the hands of the major tyre companies, who account for as much as 85% of UK output, according to Wilson. This includes Michelin in Stoke-on-Trent, which is the biggest UK exporter of retreads.
The business model is nevertheless different to regular tyre production, which in recent years has been marked by a switch to bigger factories for economies of scale.
“To offer an effective retreading service you need to be close to your customers,” says Dirk Reurslag, sales director for Industrial Solutions at VMI Group. “The model we’ve seen is for the tyre makers to give selected retread companies a licence and technical support, a kind of franchise with the name of the tyre maker above the door. That’s the structure that is now mature in North America and Europe, and is on the rise in developing markets like India.”
Prominent retreader, Bandvulc was bought by Continental in 2016, for example, around a decade after Bridgestone paid a billion dollars for Bandag, another major player. The biggest remaining independent retreader in the UK market is Vacu-Lug.
Reurslag points out the contradiction. Retreads need to be made in bigger volumes in fewer plants in order to justify investments in new equipment, but such a setup goes counter to retreading’s traditional strength – being close to the customer to keep costs low, including the cost of transporting carcasses for retreading and finished products. That’s less of an issue in the UK and across Europe than in India or the Americas, and it is why Continental, Laurent Retreads and others are able to keep the more expensive hot-retreading process viable in Europe.
The VMI executive is nevertheless optimistic that tariffs would revitalise the retread market here. In the long term, he hopes that China might also get on board, with the appropriate government support, noting that some China-made CV tyres are already suitable for retreading.
“It would be a good thing for both the industry and the environment,” says Reurslag. “If the price of raw materials were to rise, that’s another force that could prompt action. For the moment, the dumping of tyres that are not usually suitable for retreading is holding this up; we’ve already seen the problem addressed [with tariffs] in territories such as India and Brazil because it was harming the tyre and retreading industries. It looks like we will now see something similar in Europe as well.”
