Turkish Retread Market – Overcrowded

Turkey has a market for approximately 1.2 million new truck tyres annually. Ninety five per cent of the truck tyres are tubeless radials. When asked about the dynamics of the Turkish retreading market, the president of Lastik Kaplamachi Denegi (LKD) Vedat Ozcelik, said, “About 350,000 truck tyres are retreaded annually. Turkey has about 280 retreaders, 85 % of the business is controlled by the cold process. We have about 180 cold cure retreaders and the 15 % hot cure business is run by about 100 retreaders.

“We have too many retreaders, maybe 5 times more than are required. I believe this market requires not more than 30 retreaders,” added Adnan Cetinkaya, Country Head of Kraiburg. By an independent estimate, Turkey consumes approximately 4,500 tonnes of tread annually.

“The capacity of all retreaders is much higher while actual use of the capacity is only 35 %, or it may even be less whilst the retread ratio is still low at below 25 per cent,” believes Faruk Uslu, Production Manager, Retread and Commercial Tyres, Goodyear. A large number of retreaders are not following the quality standards that big retreaders are setting, neither are they investing in plant and as a result they playing spoilsport with the price, affecting the business of the organized retreaders. At least the local tyre sector, as well as retreading industry, is spared from Chinese tyres as they attract high 65 % anti-dumping duties.

The Turkish retreaders’ association, LKD, formed in 1994, has 30 members mainly from the top retreaders in the country. “These 30 retreaders control 60 % of the retreading business of Turkey,” informed Vedat. When asked about the significance of the association, Vedat replied, “We have been lobbying for the speedy implementation of ECE 109 in Turkey. We expect it to be enforced in the next year and with that about 60 % cent of the small retreaders who are not investing in machinery or maintaining quality will have to close down their operations. It would help in the consolidation of the business as well as being an improvement for the Turkish retreading industry. ECE 109 would ensure retreaders as licensed operators would have to develop the quality and performance of retreaded tyres on par with that of new tyres.

“With ECE 109 in force the number of retreaders would probably drop. With the improvement in quality of retreading standards, the percentage of retreaded casings would also increase. Currently, only 20% of new tyres are retreaded, but the percentage is likely to double in the years to come,” hoped Mr Necmettin Halic, Production Manager, Marmara Lastik.

As with any other market the retreading industry also faces the problem of a shortage of casings as those suitable for retreading are not easily available and the import of casings not permitted. “It is a sign of us being an underdeveloped country as old and retreaded casings are freely imported in Europe. Turkey’s membership of the EU is also pending and this present policy may be reviewed once Turkey gets into the EU,” said an industry expert in Turkey. The awareness level about retreading is high in Turkey and it has been accepted as an alternative to new tyres. A

ll the major global brands such as Goodyear, Michelin, Kraiburg, Marangoni etc are available in Turkey with good distribution. Even local players like Tatkap, Rekor and OZKA are well established, having widespread dealer networks and have ambitious growth plans for the domestic and international market. Besides, fleet owners are very much aware of tyre management programmes as they operate their trucks throughout Europe.

“Fleet management is growing in Turkey and ironically, it is the fleet owners that are forcing us to start fleet management here as they know the popularity of the concept in Europe,” said Mr A Sarp Tekin, General Manager (Fleet Management), Tatkap. Even an indigenous company like Tatkap is so well represented throughout Turkey that it has contracts with 15 retreaders in 15 cities.

“If our fleet management clients face any problems in any other city, we immediately call the local retreader with whom we have a contract to retread the tyre from our client,” explained Tekin. Turkey lies to the east of Europe and has for millennia been at the crossroads of international trade so is fast becoming a major base for large intercontinental haulage fleets.

Issue 2008/2