Wu: Technology and Related Products Will be Future Trend

According to Wu Wen Hsin, the Convener of the Retread Manufacturers' Group in Taiwan, the Taiwanese market is not large, with a turnover of about NT 1.5 to 2 billion annually. The local market does not offer good development prospects for the industry, and ongoing radialisation is one of the main reasons.

"Although the monetary value of exported products is growing, there is a decline in the volume. This is because the value of the exported products has been switched from low priced products to higher value products. "

"Currently", Wu continued, "the local retreading market is down by 20-30% due to the global economic downturn. However, with the beginning of the 88 Flood disaster rebuilding projects, there is an obvious increase in demand.

"There are seven main players in the industry", Wu said, "which include Yu San, Fu-Chian, Tong Ta, Suntex, Jiann Fa, Liu Rubber and Hwan Ya. What is rather interesting is that 90% of the retreaders produce their own rubber compound for their own use, and none of them sell to the other retreaders because of the competitiveness of the market. "Those who do not produce their own rubber compound will buy from Malaysia or other countries, but not China. At the moment, there is no importing of rubber compound and retreading equipment from China, and I believe that the Chinese rubber compounders and retreading equipment manufacturers will have no influence and competition in our market in ten years' time, as they started quite late in this industry, and they will need time to pick up in terms of technology and product quality."

Precured is very popular in Taiwan and takes up about 60% (TBRadial: 65% & TBBias: 35%) of the market share, while hot cured occupies 40% (TBRadial 20% & TBBias: 75%) of the market. There has been no passenger car tyre retreading in Taiwan for over ten years, now. When asked about the challenges the market faces, Wu replied that, the main challenge is the misconception of the government on retreaded tyres. "Every time the government sees rubber on the highway, it assumes that it is from retreaded tyres. The media has made this even worse by overstating the cases. The truth is that there has never been a case of an overturned vehicle due to the use of retreaded tyres. However, our government has banned the use of retreaded tyres on the rear wheels of a coach, and this is a regulation that you seldom find in other countries. "

Apart from this regulation, the Taiwan government has implemented a Voluntary Product Certification (VPC). Wu explained, though it is named as "Voluntary Product Certification", it is in fact half mandatory. Effective from 2007, all the rear wheel tyres of a truck must have VPC in order to be able to travel on the highway.

"The majority of the retreaders have already obtained VPC. This regulation has contributed to the progress of the retreading industry in the country," he added. Another challenge faced by the Taiwanese retreaders is competition. Wu said, the retreaded tyre price in Taiwan is quite low as in the past it was easy to enter the industry, and some retreaders were happy as long as they are able to cover their costs. Thus, the competition is severe, some retreaders are now unable to make a profit, and they do not have the ability to invest in equipment, processes or the upgrading of their technology.

The Retread Manufacturers' Group is under the umbrella of the Taiwan Rubber Industries Association (TRIA). At the moment, it has 12 members.

As a new elected Convener for the group, Wu said, he hopes to be able to correct the misconception of the media and government on retread tyres, and bring them, as well as the public, to understand that retread tyres are truly environmentally friendly tyres. The rubber on the road is not necessary from retreaded tyres, but it can be also from new tyres. It is normally caused by aggressive driving when tyres are under-inflated, which leads to overheating.

"I hope to produce a documentary on retreading, so that whenever the media make a misleading report on retreading, we will be able to show them that retreaded tyres are good, environmental friendly and safe. I believe that a short and clear documentary will help the public and the government to understand the truth and the benefit of tyre retreading."

Wu sees there is development constraint in the local market, and the future trend for the Taiwanese retreader is to export their technology and products to China, or world-wide.

"Japan's trend master, Dr. Kenichi Ohmae, who is described as "Mr. Strategy" worldwide, visited Taiwan early this year. In his talk, he said, in the next 30 years, there will be good development potential in China. Over the previous 30 years, the retreading industry in China has been in its infant stage, so the Taiwanese retreaders that tried to develop in China all failed, only new tyre manufacturers such as Cheng Shin and Kenda, Hwa Fong succeeded. The next 30 years will be the opportunity for retreaders, as the Chinese consumers now understands retreading better, and their tyre sector structure has been greatly improved compared to the past (it will continue to improve). Thus, the Taiwanese retreaders who have the technology and management advantages should go and exploit the market. Moreover, it is the same culture and same racial market."

Issue 2009/4