Treadsetters and UK Tyre Group Partner in Durun Joint Venture
The two parties are clear that the object of the arrangement is to build a channel for the Chinese-produced high performance tyres to get to the retail market, with a view to developing 100 per cent UK coverage. The plan is to achieve this by offering each UK Tyre Group member an exclusive sales territory. This will also mean that all Durun sales will have to be conducted by or through group members. UK Tyre Group’s Peter Burgess is confident that as the number and diversity of group members expands, sales will follow suit. Durun sales are growing quickest in Wales where Treble B is doing a lot of distribution.
As a result Treadsetters currently imports between 15 and 16 containers a month into the UK, but Tim Davis told T&A that this will soon be ramped up to around 30 containers a month. As part of the agreement, the Durun project keeps holding stock at Treadsetters’ warehousing facility, with the option to carry additional product at UK Tyre Group’s warehouse in Andover. Together the companies say they have the opportunity to offer “a uniquely consistent supply chain to the market.” Up until about four years ago, the UK Tyre Group had been known as a regional organisation. Since then it has grown from being a 14 member buying group into a 24 member-strong cooperative, representing over 100 retail outlets. (The word is one or two new members are already waiting in the wings). And after a relatively static year – in terms of member growth – last year, this year both Treadsetters and UK Tyre Group see the Durun cooperation as a catalyst for further expansion.
“Dealers want a twice daily service – this is where our market is,” Peter Burgess said in an interview with Tyres & Accessories, adding: “Durun has and will help us grow with a view to increasing membership quite significantly.” Anyone interested in finding out more about selling Durun Tyres should contact Treadsetters’ Tim Davies on 01925 684168, Peter Burgess (01883 341241) or Terry Rolt (01202 481395). Alternatively, Treadsetters and UK Tyre Group run a Durun distribution information website – www.duruntyre.co.uk. Yongtai who? For those of you who are hadn’t heard of Shandong Yongtai Chemical Group before today, here are some of the main facts about this Chinese tyre manufacturer. Located in Dawang rubber industry area of China’s Shandong Province, Yongtai produces up to 900,000 truck radials and 4 million light truck/passenger car radials annually. The Chinese manufacturer employees 2500 workers and reportedly has a five-year plan to increase production to 1.2 truck/bus tyres and 10 million light truck/passenger car tyres a year. Group assets are stated as 1.5 billion yuan. In addition to Durun branded products Yongtai also produces over 800,000 Goldway brand bias tyres including truck, light truck and agricultural products.
T&A understands that, at current production levels, 1.5 million units of Yongtai’s total capacity are Durun-branded passenger car and light truck “all-steel” radials. Unlike some tyre manufacturers Yongtai is 100 per cent family-owned, meaning there is no direct government intervention. And, in order to maintain a smooth working relationship with the UK distributor, one Chinese contact is permanently working out of Treadsetters’ head office. Yongtai’s current largest export market is the US, but in the last five months following the Treadsetters deal the UK has risen to the second largest export market. This means, in Tim Davis’ words, product prices are good and crucially quality is “phenomenal.” During the production process every single tyre is balanced and catalogued with a serial number. At this stage the weight needed to balance the tyre is used a means of standardisation and each tyre is graded either A, B or C.
Only the top-graded stock is brought into the UK and Ireland. Another interesting feature of the production process is that every tyre is inflated to standard pressure after curing as a way of improving uniformity. According to Davis, Yongtai are “desperate to get it right”, something that is demonstrated by the company’s willingness to invest in new machinery and achieve all the relevant standards. Based on Tim Davis’ visits to the China, the Yongtai factory is said to be kitted-out with some of the most modern production machinery available, including items like a set of Troester-produced duplex extruders that Yongtai has acquired. As a result, the Yongtai factory has successively achieved certification in ISO9001-2000, CCC, DOT, E-Mark and Inmoto standards and has big plans for increasing production and distribution in the future.