Retreaders Work on Their Contacts in Singapore
Tyrexpo Asia is not only a very interesting show for wholesalers, dealers and manufacturers of new tyres. In parallel with the increasing “Westernisation” of many markets in the region, suppliers of treads and tread rubber as well as equipment for the retreading business play an increasingly important role for Tyrexpo Asia, and this has not only been the case for this year’s show. Despite this, it has to be admitted that in previous years more companies from the retreading industry were present during the Singapore show, such as, for example, Goodway from Malaysia or Vipal from Brazil. So, this year’s exhibition appeared to lack some important market players. However, many others, including several companies from Europe and Northern America came or returned to exhibit at Tyrexpo Asia and thus benefited from it.
One of these companies was General Rubber, which is one of the leading companies on the Indian retreading market. The family-run company is not only interested in its own domestic market; for about five years it increasingly has become committed to export markets, explained director Paulose Varughese, who runs the company together with his brother B.F. Varughese and their father. General Rubber was founded in 1969 and mainly produces “Midas Mileage” branded pre-cured treads together with curing envelopes, bladders and cushion gum. About 60 per cent of General Rubber’s annual production (1,650 tonnes) is made up of pre-cured treads for commercial tyres. As Paulose Varughese points out, Midas treads offer an above-average mileage, a fact that has already been proven on several markets, mostly in the Middle East but also in Europe. But because General Rubber only started to export its products some five years ago it still has only a few well-established or institutionalised business relationships with distributors or retreaders in the above-mentioned markets. This is now potentially changing thanks to the company’s presence at leading international tyre shows such as Tyrexpo Asia. Although General Rubber realised its interest in export markets only recently, already about 20 per cent of its annual turnover is generated abroad. According to representatives of the family-owned business, General Rubber generates an annual turnover of about US$40 million.
It is worth pointing out that Southeast Asian markets are not necessarily core markets to the Indian company, although it chooses to exhibit in the southeast corner of the continent. Although it did generate one new customer through its time in Singapore, its attendance at Tyrexpo Asia is mainly used in order to establish and maintain contacts with customers from around the world – not just from the region. General Rubber doesn’t usually sell its products directly to the consumer, instead choosing to closely cooperate with distribution partners. Even in Kerala, India, where the company is based the manufacturer of the Midas brand chooses to focus on what it knows best: the production of retreads, retreading materials and related products. The company operates eight production sites, six of which are directly based in Kerala.
A similar product portfolio is offered by Kayel Rubber Products. The Malaysian company is the number three on the domestic retreading market behind market leader Goodway and Sun Rubber. Just three years ago Kayel Rubber has opened its second factory for the production of pre-cured treads. This factory was a greenfield project and was able to almost double Kayel’s annual production capacity from 600 tonnes, as general manager Lim Hua Liang stated. “The major part of our business is pre-cured treads”, Mr Lim continued, although Kayel Rubber Products also produces compounds for the mould-cure retreading process. In order to produce these compounds as well as the pre-cured treads Kayel uses a rubber compound called “Formula K-Plus”. Pre-cured treads, compounds and cushion gum are exported to more than 30 countries, with Kayel’s export focus clearly lying in Southeast Asian countries.
On its home turf Kayel Rubber is not only active as a supplier of retreading materials. The company, which belongs to the Kit Loong group, is also itself a retreader and operates three retreading facilities in Malaysia. As Lim Hua Liang points out Kayel Rubber was the first and still is the only retreader that operates shearographic tyre inspection. The retreads produced in the three Kayel facilities are specifically produced to suit the demands of customers looking for high quality products; Kayel’s retreads are known for offering very good mileage, he continued. Currently in Malaysia every second truck tyre is a radial tyre but radialisation is continuously and strongly growing, guaranteeing even more business in the future.
So far Kayel Rubber Products has exhibited at every single Tyrexpo Asia because Singapore also possesses something akin to a home market status for the company as the city-state shares a common boarder with Malaysia. As the company pointed out it has a respectable market share in most of the Asian tyre markets. The European market, in turn, currently does not take top priority, the general manager said; in Europe there were “no plans for the immediate future.”
Elgitread from India, one of the largest players in the retreading business, also belongs to the regulars at Tyrexpo Asia. As the family-owned company pointed out, it has an annual production capacity of about 25,000 tonnes of retreading material, among which there are pre-cured treads for numerous applications. To put this figure into perspective: Kraiburg Austria in turn produces about 23,000 tonnes of retreading material every year. On top of its retreading material line-up Elgitread also offers equipment, machinery and accessories for retreaders, although these are not offered in Europe. Elgitread’s sheer size enables it also to operate a spread-out network of 364 franchised retreaders. All of these companies are equipped and supplied by Elgitread as a system supplier. Elgitread, based in Coimbatore in the Indian state of Tamil Nadu, as well as its franchisees, are partners to the new tyre industry. The new head of Elgitread’s international marketing department, R. Srinivasan, lists companies such as JK Tyre and Industries, MRF, Apollo Tyres as well as Bridgestone (although Bridgestone imports all truck tyres it sells in India it does produce passenger car tyres locally) as Elgitread’s customers.
For VMI-AZ Extrusion from Bavaria, Germany the tyre show in Singapore can be seen as part of an introductory tour. The company already enjoyed an international standing and reputation even before the Dutch VMI group took over the German company A-Z Formen- und Maschinenbau in August 2004 and then established the new company as a specialist for extrusion technology and retreading systems. However, it was only really since this time that the company began to partially veer away from its strategy of focusing mainly on European and North American markets. As distribution director Robert Endres pointed out, it was not only retreaders and system suppliers around the world that stood to be potential customers for the technology provided by VMI-AZ Extrusion but also the new tyre industry. In order to be present where the tyre markets are currently experiencing the strongest growth the Dutch-German company recently opened a liaison office in Malaysia’s capital Kuala Lumpur. Furthermore, it established a subsidiary in China: VMI Yantai Ltd. As Mr Endress points out, VMI-AZ Extrusion is currently in a good position to work in the booming tyre markets in South East Asia as well as China.
Also, for the distribution director and his colleagues from the region’s subsidiaries and offices Tyrexpo Asia is a good meeting point with other industry executives and potential customers. Furthermore, the exhibition also offers good opportunities to travel within the region, said the director, and thus meet up in person with customers and potential customers in their own facilities.