STE Becomes Beststone Retreading's First Franchisee

STE Supply Sdn Bhd, a company that specializes in importing and exporting used tyres and casings has become Beststone Retreading's first franchisee in Malaysia. This news has spread and become one of the hottest topics in the local retreading industry as the market is so competitive and there have been no new players for many years.

"We have been in the used tyre and casing import/export business for 6 years, and there are always requests from our customers to also retread the tyres for them. Over the years, we have supplied a small quantity of retread tyres to some of our customers and the demand has increased rapidly of late. We see the market potential and have decided to expand our services by venturing into retreading," said STE Supply Sdn Bhd Managing Director Andy Wong.

As the Chinese saying goes "A good start is halfway to success". Wong has been very selective in choosing whom to work with in order to create a strong foothold right from the beginning.

Why Beststone Retreading? Wong replied confidently that even though Beststone Retreading had only just set up its marketing arm in Malaysia 6 months ago, and has been viewed as a new player in the local market, the company is a major player and has a strong set up in China. "I went to visit their rubber compound manufacturing plant in China, and came back tremendously impressed by its advanced technology, as well as its state of art equipment and operation. I suppose this explains why they are one of the major rubber compound suppliers in China. As you know, it is not easy to penetrate the Chinese market, unless you are able to provide quality product with the right pricing, and also you need a strong network. I am even more convinced now that I have tested their products. "

The whole process went smoothly; Beststone went above and beyond to make sure that everything was in place. Within three months, the factory's set up is in order, the installation and equipment trial run have been done efficiently, and they have rolled out the first 1000 retreads.

"We are manufacturing 100 per cent precure retreads," said Wong. "Our customers are mostly end-users such as fleet and bus companies. The response from our customers has been very encouraging. Currently, besides Kuala Lumpur and Selangor, they also cover the Melaka and Penang markets."

The experience and contacts that Wong accumulated in the used tyres and casings business, has, to a large degree, become his strength and competitive edge. As a tyre casing specialist, he knows the importance of a good casing when it comes to retreading. "All of our casings are imported from Japan, which is famous for its premium quality. To be able to produce a good retread, one needs sound casings, good raw material, skillful and experience production people, advanced equipment and technology backup," he stressed.

The co-oporation with Beststone allows STE to tap into the collective intelligence, experience and technology the company has amassed over the years. Wong also added that as Beststone is a one-stop provider, it makes things easier and less risky for the new players. It helps new players to start on the right footing by providing everything, from factory and equipment set-up and training right through to rubber compound and technical backup.

Currently, STE's plant is running on one shift. To be able to meet Wong's target of producing 3000 retread units per month, he is planning to run 24 hours in the future. "I know that the competition is severe, but I still see the potential. Beststone's rubber compound is aimed at the medium and high-end market. I can see there is still demand in this segment, and I do hope to open a second plant in Seremban after this first retreading plant has been established."

Beststone Rubber (M) Sdn Bhd Managing Director Alex Ho said, as this is their first franchisee in Malaysia, they are also equally cautious. However, they are convinced of the reputation and strengths that STE obtained over the years, and believe that this will be a win-win cooperation for both parties.

Beststone held an opening ceremony on the 28th September for its marketing office and rubber compounding plant in Seremban. With the new Malaysian plant fully in operation, the group's plant capacity will reach 30,000 tonnes per year.

Issue 2010/4