The retreader has continued to invest in its manufacturing processes, including a second 12-segment, high pressure (300psi) press on which its Logistik brand products are produced
Vacu-Lug’s stand at the recent Commercial Vehicle Show in Birmingham provided a summary of the tripartite business of one of the UK’s largest retreaders. Featuring its Vacu-Lug Management System (VMS) for online fleet application; its UK exclusive distribution of ZC Rubber’s (or Hangzhou Zhongce’s) Westlake truck tyre product range. in partnership with global Westlake partner Zenises; and Vacu-Lug’s own retread range – including the latest “premium” Logistik drive LD01 and the Logistik trailer LT01 retreads, and Duramold tyres designed for a cross-section of heavy and light truck operations – the company showed its relatively recent evolution into more rounded service provision. In terms of its retreading activities, estimated by the company to account for just under a fifth of the UK market, the last year saw upgrades to the Lincolnshire business’ manufacturing, with a second 12-segment, high pressure (300psi) press installed, with which its Logistik brand products are produced, alongside further phases of its new conveyor system and other general upgrades designed to improve product flow, utilisation, productivity, efficiency, and housekeeping. Tyres & Accessories spoke with Vacu-Lug fleet sales director, Dave Alsop during the show, who explained how the company has reacted to the contraction of UK retreading and various other challenges in the market.
Alsop measures the shrinkage of the UK market over the past three years somewhere between a third and two-fifths: “Three years ago it was probably somewhere in the region of 850 thousand units. We predict that this year it will be somewhere between 500 and 550 thousand units.” Vacu-Lug itself, he estimates will be responsible for “just under 20 per cent” of this, although “probably more than that if we add in the Pirelli products we manufacture and our industrial and earthmover retreads.” With the withdrawal of Goodyear, this leaves Vacu-Lug in a select group of large-scale retreaders in the UK, with its particular strengths in supplying “the waste sector” and industrial and earthmover retreads.
As a privately owned business, Alsop adds that Vacu-Lug “can react quickly” to both the “UK market situation” and customer demands. “Our business model is such that we can make decisions… We are only a small management team: the managing director, operations director, sales & marketing director, finance director, and the head of production. At the end of the day, if we need to make a change, then we will sit down and make the decision.” Having said that, the larger-than-most scale of Vacu-Lug’s operations remains important, Alsop adds. “We are and have been managing Veolia [Environment} for the last 18 years, probably one of the biggest fleets in the UK with 4,500 pieces of kit, from their wheelbarrows in central London right the way up to their wet waste tankers, and yellow planting machinery. When you have a customer of that kind of size, it’s absolutely vital that we can manage the finance aspect and also react quickly to anything they want.”
Vacu-Lug’s relationship with Veolia was illustrated recently by the recent EcoVadis audit of the retreader’s sustainable CSR policies, receives a Gold standard rating achieved by fewer than five per cent of companies globally. The audit encompasses 21 criteria across environmental, social policy, ethical and supply chain areas, and the evaluations are used as a tool for a sustainable procurement policy that cover a supplier’s risk management issues and identify with them best practices and areas for improvement.
Is reduction in UK retreads reversible?
Given the challenges posed to the retreading market by the continued influx of new, cheap imported tyres (the damage caused is illustrated by the UK contraction), and legacy problems in reduced suitable casing supply providing an aftershock to UK retreaders, T&A questioned whether the drop in UK retreads is reversible. Vacu-Lug’s view is that it is, Alsop explains: “I think that the Chinese products that are coming in very, very cheaply aren’t here to stay. There are already people here talking about China contracting and some of the manufacturers are going to the wall. They cannot afford to support products that cost less [than the materials, manufacturing and shipping costs]. For example you see some new steer tyres sold into the trade for prices in the high £80s for a 295/80 – if you weigh it, the materials cost more than that, but that tyre also has to be shipped, and somebody has to have made margin, hedged for exchange rates etc. I cannot believe that is sustainable for a long period of time.”
While Alsop doesn’t think anything is going to happen immediately, he does believe a tipping point is approaching. There are also political aspects to the situation, since the tyre “has to be scrapped” after use, which of course “costs a lot of money”. Having said this, Vacu-Lug’s casing supply is said to be steady. Alsop told T&A that getting hold of casings is “fine now. There are lots of casings about, so we don’t generally have any problem with them. We have problems with 11R22.5s and possibly sometimes 315/80s, but all the rest have never been a problem.” Casing purchase agreements are not a necessity now – in part due to the reduced volume of retreads being manufactured. Alsop said: “we’ve got as many casings as we need because obviously our volumes have declined, though not as much as some of the others.”
Smaller scale retreaders, and those who lack the contract work of the larger players are those most suffering from the competition of cheap imported new tyres, Alsop adds, explaining that this competition is an impossible situation: “Let’s say you get a cheap Chinese drive tyre for £125 – you’ve got to be a seriously good retreader to make a retread for that while making a margin out of it. We have one tyre that is £95 for a 295/80 – it’s a hot-cure, which generally costs a lot more to make because there’s a lot more rubber in it, and it looks brand new.” Without access to the latest shearography or retread manufacturing machinery due to the high cost of initial investments, Alsop explains that quality is “a worry” in this sort of competitive atmosphere: “Each of our new presses… can mean investment of up to £75,000. For example our latest technology, with which we are making the Logistik LD01 [regional and long-haul drive tyre] is 12 segments and ultra-high pressure (300psi); no one else in the UK is using that technology, except Dunlop Aircraft Tyres. We’re the first to have brought that in – but you can’t do it without continual investment.”
Low-cost imports and retreading
Vacu-Lug is also concerned about the knock-on effects of this competition with the lowest-cost imports for the reputation of retreads: “One thing that concerns us is that we are actually seeing casings come back for somebody who has pre-cured one of our retread tyres. So they’ve got a Vacu-Lug DuraMold WZY2 that’s been buffed off the top and they’ve put another cap on it. At that stage that tyre has probably been used three times. That worries us, because the cheap pre-cure retreaders bring the reputation of the premium retreaders down.” Vacu-Lug engages in a high level of quality assurance, with an emphasis on external product evaluation and internal checking processes. Alsop adds that “the 170 people that work within Vacu-Lug have an average service length of over 15 years,” making them “highly skilled, [which is just as well] given the number of manual interventions that go into manufacturing a retread tyre and how many specialised people go in to touch it.”
Vacu-Lug has also fought fire with fire when considering imported products with its deal with Zenises to distribute Westlake brand truck and van products in the UK. It is also the UK importer of Yokohama truck, industrial and earthmover tyres, and has a partnership with Pirelli, for whom it manufactures Novateck products, and whose casings Alsop describes as “the best casing out there.”
Alsop also commented on how he sees the comparative ecological friendliness of retreading taking a back seat to price once again. “You can actually say that comparing a retread against a tyre manufactured using virgin materials you save 75kg of oil, carbon emissions and so on, then [extrapolating from that figure] based on the numbers sold.” In order for fleets to calculate a true reflection of the environmental impact of their tyres, it is also necessary to consider the performance characteristics of these products of course. The difficulties in producing a standardised tyre label for retreads have been documented before in these pages, and in any case faith in the concept among those in the industry is at best variable.
The performance of retreads in terms of rolling resistance and other metrics is nevertheless an important part of the proposition for fleets. Alsop told T&A that “there’s starting to be” more interest in how retreads are expected to perform in a greater range of performance criteria. However, Alsop also pointed out that the substantial barriers to scientific comparisons – such as the very small percentage of close-coupled truck and trailers, or the variability of operating conditions – might make these comparisons less accurate than might be assumed. “The actual compound element obviously has an impact,” he says, “but it’s a very small impact, and just the wind blowing in one direction will knock all that impact out.” Unsurprisingly Alsop describes himself as a “cynic” when it comes to low rolling resistance tyres. In the context of the UK retread market’s low ebb, Vacu-Lug’s attention is perhaps understandably more focused on investing in production processes and extended services for fleets. firstname.lastname@example.org