Reifen Müller expands its mould cure retreading operation
Companies wishing to survive as retreaders these days either need to find a profitable niche where few competitors exist and margins are high or they must have the absolute will to follow current market trends and the ability to invest. A factor particularly responsible for changing the market is the growing demand for premium retreads by professionally managed fleets – the new tyre industry is a driver of this change. Therefore small and medium-sized retreading firms must make an effort to retain sufficient business. A real-life example of a company that is thriving despite the market changes is Bavaria, Germany based Reifen Müller.
In comparison to some competitors the Reifen Müller retreading facility – a sister company to the wholesaler and 29-outlet chain bearing the same name – can hardly be considered a long-established, traditional industry fixture. And while managing director Uwe Müller fondly reminisces about the company’s achievements, the retreading operation itself has only existed for 18 years. After his father Otto Müller (70) began in the tyre business in 1965 almost three decades passed before the company made an observation: It could itself manufacture the growing number of retreaded tyres it sold. And with this simple thought a business idea was born.
A pre-cure retreading facility was established in 1993 and after only a few years growth was such that more space was needed to accommodate essential expansion and investment plans. In 2001 the company left this site and moved to a new facility some 30 kilometres away from the old plant, and in the ensuing years this second plant has also been expanded several times. The first such project was a new warehouse and casing test facility; this was followed by a new loading/unloading dock and another warehouse.
This short overview suffices to show how quickly Reifen Müller has developed its retreading facility in the space of just 18 years. As Uwe Müller explained to Tyres & Accessories, the abovementioned facts speak of rapid company growth. Nevertheless, his view is that quality is always more important than quantity. This is a reason why Reifen Müller markets its retreads under the specific “RM-Qualitätserneuerung” – a quality retread from RM, or Reifen Müller. The company doesn’t brag about annual output and only says its daily production is “up to 380 tyres.” Of course, any retreader claiming these levels can be objectively appraised as being one of the country’s largest and simply doesn’t need to boast about such figures in order to raise its public profile.
Yet the German retreader aims to gain a foothold in the quality retread segment and these days feels more at home there than ever, Uwe Müller comments. The Reifen Müller retreading plant is a Marangoni partner and utilises the Italian company’s quality Ringtread treads. “This is our premium product,” the managing director notes during a tour of the facility and points out the new Marangoni “Ringbuilder 3000” that recently entered operation there. In addition, Reifen Müller remains a partner/licensee of three well-known new tyre manufacturers and produces the NextTread (Goodyear Dunlop), Novateck (Pirelli) and Bridgestone’s Qualitread brands. These pre-cure licensed products account for around 20 per cent of the tyres Müller retreads, the managing director reports.
At this point, Uwe Müller considers it important to mention that the company is not a Bridgestone-Bandag franchisee, nor has Reifen Müller ever felt compelled to seek out the affinity of any of the other major system providers, such as Michelin’s Recamic network. “We’ve always been free,” the managing director continues: “Freedom is more important for us than strong industry connections.” He also sees this independence as a major success factor as it enables Reifen Müller to “quickly respond to the market.”
Retreader investing in structural change
Recently the company impressively showed just how fast it can respond. In March 2010 Reifen Müller ceased being “just” a “classic pre-cure retreader,” to use Uwe Müller’s description of the company’s earlier years. Since this time the retreader has operated a mould cure vulcanisation press and an extruder. And in August 2011 Reifen Müller added two additional presses to its operations, steam-generator driven units produced by Italian firm Cima Impianti (the first press is electric powered). These respective investments were of course not decided upon and implemented overnight, however they show the company’s ability to respond to changes in the market. Had it been contractually bound to a pre-cure retreading system provider, Reifen Müller would have lacked the freedom as a company to move in a new direction.
Why then was this new direction necessary? A key reason comes immediately to Uwe Müller’s lips: the new tyre industry. In recent years these manufacturers have paid increasing attention to the industrial retreading and marketing of retreaded tyres. In this segment they have also promoted to fleet operators a sense of quality that small to medium-sized retreaders know is difficult to attain with traditional pre-cure retreading. In recent years the difference in quality between pre-cure and mould cure retreads has – generally speaking –increased. And no matter how rigorous the quality control, how good the production process and the quality of materials used in the pre-cure retreading process – the appearance of mould cure retreads are naturally impossible to beat, and Uwe Müller notes that mould cure trailer tyres also offer a technical advantage: Full-form mould cure retreads are more reliable and provide better mileage.
Reifen Müller’s investment in mould cure retreading thus meets a market demand that – at least at the moment – delivers significant growth. The fact that tyre makers such as Continental and Goodyear have become involved in this business shows that others also see this potential. As the first mould cure press at Reifen Müller only entered service around 18 months ago, currently mould cure retreading only accounts for a small proportion of total production. This is expected to change when the two new presses start operating last month, however; within the next two to three years the percentage should “increase to 20 to 25 per cent.”
The fact that this percentage increase will not be achieved through a decrease in the absolute number of pre-cure retreads produced shows that investment is also occurring in this part of the business. This year two additional new autoclaves entered operation at Reifen Müller, and now the company has a total of five modern Scholz autoclaves available for pre-cure retreading.
The branches run by Reifen Müller’s sister company play an important role in the growth of the retreading business area. Every second retread the company produces is sold through the 29 Reifen Müller branches (which are managed by Uwe Müller’s brother, Klaus); the other half are sold by tyre dealers located within a radius of 100 to 150 kilometres of the retreading plant.
Dealing with retailers situated in close proximity to the plant means Reifen Müller can use its own fleet of trucks and drivers to its advantage when acquiring casings. Müller explains that its drivers are qualified to decide at the customer’s site which casings will be sent to the retreading plant and which won’t. Even without this added benefit, close proximity to trading partners in itself plays a major role in the successful acquisition of casings. Last but not least, Reifen Müller is not bound to any particular brand of casing, and this offers a certain advantage with dealers in comparison to industrial systems. And it also goes without saying that the sister company’s branches are “very, very important” to the provision of retreadable casings as Reifen Müller has the luxury of selecting the best casings without worrying about competitors. Nevertheless, a large quantity of casings must also be purchased on the open market in order to supply sufficient quantities. It is clear to see that Reifen Müller is prepared to follow current market trends and is capable of investing appropriately. This year alone the retreading facility invested around 1.2 million euros in its two new presses, the 14,000 m² loading/unloading dock and the new 12,000 m² warehouse. New shearogaphy equipment was purchased just two years ago in order to control 100 per cent of all casings for potential invisible damage. And when asked about further investment plans, Uwe Müller’s answer is clear: “We want to further expand our mould cure retreading to remain technologically up to date.”