The retreading sector in Uruguay has stabilised following a considerable contraction in the market during 2015 caused by various economic factors including continuing increases in the import of low-priced Chinese tyres into the market. This was the overall picture which emerged following a visit by Retreading Business to several of the Latin American country’s leading retreaders.
Uruguay is a small country with only 3.5 million inhabitants, of which 1.5 million live in the capital city, Montevideo. The country is relatively open in terms of commerce, and this holds true also in the tyre industry. All tyres are imported, many from other Mercosur countries, but the country has also seen a considerable increase in the import of Chinese new tyres in recent years. This has heavily impacted on the retread sector, not least because the value of those tyres imported has also fallen substantially over the same period.
According to figures provided by the Uruguayan Retreaders Association, the key moment when the market turned was in 2015. The value of the Uruguayan retread market fell from USD 4.3 million in 2014 to USD 2.4 million in 2016 – a huge loss by any standards. The market, meanwhile, recovered slightly to USD 2.7 million in 2017 as retreaders adjusted to the new market reality.
Uruguay is a market, which is relatively easy to define, because there are only nine retreaders in all. The market is measured in terms of pre-cured tread imports as there are no domestic producers of tread rubber.
The three largest retreaders are Tipler dealer Gaderey SA trading as Recopuma, Mercedes based Recomer (Vipal) and Michelin importer Liepsi, whose Recamic retreading facility is based in Montevideo. These three companies are roughly equal in size and account for two-thirds of the market. Their relative shares vary from year to year, although Recopuma currently claims market leadership with around 26% of the market.
There are then two medium sized retreaders, Montevideo based Rolcon, who retread mainly using Galgo tread rubber, and Marangoni dealer Marnu, located in the North Uruguayan town of Tacuarembo, in addition to the major bus company, CUTSCA, who service their fleet of over 1,100 vehicles with their own retread plant. This second group of three companies make up just over a quarter of the market, whilst the remaining 7% is accounted for by the remaining three retreaders, Neumaticos del Lago, Duna Ltda and Coop. de Obreros.
One aspect of the market which comes out most clearly when one speaks to the leading retreaders in Uruguay is the friendly rivalry and atmosphere of co-operation between the main players, which was explained to us very eloquently by Mauricio Labadie, the Managing Director of Recomer;
“Thirty years ago, retreaders were enemies to each other,” he commented. “Now we are more like colleagues. Retreading is a brand in its own right,” he added. “We genuinely want our colleagues from the other retreaders to do the best that they can possibly do. In today’s market place retreaders have to fight together.”