From Quantity to Quality: Chinese Retreading Industry Aims to Meet Quality Challenge

The rapid, and in some areas, chaotic development of the Chinese retreading industry in recent years has posed a major challenge for opinion leaders within China, namely how to make sure that the industry copes with its massive growth and is able to meet the quality requirements of a market that is rapidly increasing in terms of sophistication.

CTRA’s Senior Consultant Gao Xiao Heng encapsulated the problem in his article “Redrafting of Tyre repair Technology – Standard Content and Requirements”. He wrote; “In recent years people have had increasingly higher quality, safety and environmental requirements and the national policy is calling for reductions in energy consumption and waste as well as an increase in the use of environmentally friendly products. However, the rapid development of retreading has brought forth the introduction of some poor quality retreads, which pass off fish eyes as pearls. Tyre repair technology should therefore aim to follow these recent trends and formulate a new Quality Standard”.

There are several areas within the Chinese retreading industry where the quality standard needs to be focused. The first of these is in the hot cure sector, which in China has a reputation as an industry that is lagging behind and where people are not prepared to invest.

Actually, about 1.4 million hot cured retreads are produced by the 15 largest retreaders in China. The problem, however, lies not so much here as with the 200 other retread plants spread throughout China, many of which are outdated, using equipment from the 1950s, are not highly quality focused, but which account between them for 2.6 million units. The situation is not helped by the fact that more quality oriented overseas retreaders who have invested in the market by manufacturing with imported machinery have failed as they have had a high requirement in terms of casing quality and have not known how to retread the damaged and lower quality casings that are available to retreaders in China. An example is a Taiwanese retreader who set up a retread plant in Shandong 10 years ago. Initially producing mostly hot cure retreads the shortage and high price increases of good casings has forced him to switch to retreading OTR tyres using the hot cured method.

The precure sector, however, has grown rapidly since the early 1990s fuelled by the input of overseas suppliers such as the Malaysian company, Newera, who have been one of the pioneers of quality precured retreading technology in that region. Newera, who set up a tread rubber facility in Wuxi in 2005, now say they have set up 30 plants in China. One of their early successes was Tianjin Shuang Shuang, which was established in 1994 when there were only 10 precured reatread plants in China. The acceptance of precured retreading in China was relatively slow to catch on though and Tianjin Shuang Shuang was in a deficit situation for several years until it started to turn around. Initially, it was difficult to persuade customers of the benefit of paying higher prices for retreads made on imported equipment and with imported materials. However, since 2000, a number of companies have begun to produce treads and equipment within China and the market has begun to accept the precured process more readily.

There are now more than 10 retreading equipment suppliers in China who will typically supply a set of retreading equipment for between 0.5 and 1 million RMB. The latest development, though, is the growth of a number of budget equipment suppliers who have made it possible to buy a set of retreading equipment and training for as little as 100,000 RMB. The growth of these companies, who are currently enjoying great success, has resulted in questions being posed about the potential impact on overall retread quality should a culture of low cost, low capital precure retreaders continue to develop.

There are, however, signs within China that developments are taking place that will have a positive impact on the quality of retreads. Firstly, Standards to be introduced by the Chinese government starting from 1st April 2008 include; Retreaded Truck Tyres GB 7037-2008 (replacing GB 7007-1992), Passenger Car Retreaded Tyres GN 14646-2008 (replacing GB 14646-93) and OTR Retreaded Tyres HB/T3979- 2007.

Meanwhile, the Transport Ministry in China has started to control overloading in recent years. This action has had a positive impact on casing quality. If the Chinese government can set up a regulation on tyre tread depth to reduce accident rates, as well as increase tyre retreadability, then the number of retreadable casings will be increased. In China, all steel radial tyres now make up 40% of the truck tyre market and this figure is increasing rapidly.

Meanwhile, the new tyre manufacturers are also taking more interest in retreading. Michelin has already set up a retreading plant in Shanghai investing over 1 billion RMB in equipment alone. Bridgestone has bought out Bandag and will no doubt develop Bandag in China to produce premium retreads. Goodyear will produce all steel TBR tyres in China in two years and has already begun to appoint distributors across the country to prepare for future development. At the same time the company has also helped its Guangzhou and Chengsha distributors set up retread plants, which will specialise in retreading all steel radials.

Some people have identified the involvement of new tyre manufacturers in retreading as a development opportunity. What is true is that no matter how quickly or slowly the government implements law and policy, if the retreaders are unable to catch up with developments, they will eventually be phased out. In order to succeed, retreaders will not only have to strive for “quantity” but also progress in quality terms. This has already been recognised by some small retreaders. For example, Mr Zhou, the owner of a small retread shop in Shanghai, recently decided to leave his old and dirty plant when he realised that he couldn’t increase his quantity, even with a low selling price. He has since relocated to a new plant and invested in a new production line specialising in retreading all steel radials. By doing this he has realised he can increase the quantity and upgrade the quality, allowing him to increase his prices to a reasonable level. In addition , with most of the retreaders competing in the priceoriented sector, he has found that he is able to compete on quality and has more space to grow.

Overall, the prospects for quality retreading in China are quite encouraging. remendously as quality increases.

Issue 2008/2