Regular readers of Retreading Business will be aware that we try our best to provide a balanced picture of the challenges faced by retreaders on a global basis, and we are always pleased to be able to analyse the market in countries we have never covered. Surprisingly, given the size of the country, one country we have never covered in twenty-one years of publishing our magazine, is Pakistan.
Sultan Enterprises Promotes Retreading in Pakistan
For that reason, we were delighted to be contacted recently by Hamza Sultan Ahmed, who represents the third generation of a Karachi-based family, which has been involved in the retreading industry for nearly 50 years.
Today, Hamza and his father, Shahid Sultan, operate Sultan Enterprises in Karachi’s Korangi Industrial Area, a retread operation established in 2011. Their experience provides an interesting picture of the difficulties developing a retreading operation in a country where there is no retreading culture.
Hamza explains: “Our family has been into tyre retreading since 1971. Back in in the 70s and 80s we had the hot cure system and were more into retreading passenger car tyres, although we also retreaded some light truck and truck tyres. In 2002 we installed a pre-cure retreading system. In 2004, my father left that business and started working in other industries, he had been there since the start in 1971.”
In 2011, a year after completing a degree in finance, accounting and management from the University of Nottingham), Hamza combined with his father to establish a new retreading plant in the form of Sultan Enterprise.
Says Hamza; “My father warned me at that time that the retreading industry is not that well developed in Pakistan. I did my surveys and checked all facts and figures and was convinced we should go ahead with this venture. Back then there were around 1,100,000 truck tyres being imported into Pakistan, out of which around 3-4% were premium brands and the rest were Chinese brands. My opinion at the time was that it must be possible to achieve sales of 12,000 tyres out of a market of 1,100,000 tyres. We did go ahead and started retreading. I was into sales since the start and used to market the product myself. We approached the majority of the corporate customers and managed to persuade everyone to get a few tyres retreaded to see how the retreading process works.”
According to Hamza, however, there are three key problems in Pakistan which are preventing the retread industry from developing;
“Firstly, there is the issue of low quality tyres. Around 96% of the market in Pakistan uses low quality Chinese brands with a high premature failure rate. Secondly, overloading is a significant issue. We have typically around 30% - 40% overloading – 22-wheeler truck with tyre size 11.00 R 20 would be carrying loads of up to 120 tons whereas it should not be carrying more than 70 tons. A 10-wheeler with tyre size 11.00 R 20 would be carrying up to 50 tons whereas it should be carrying not more than 34 tons.
“Finally,” he continues, “There is the problem of bad infrastructure. Roads are in pretty bad shape, with huge ditches and holes on the roads. If you combine all three problems together it is like a worst-case scenario, first using cheap quality tyres, then overloading on these tyres and then roads not in good shape. We have been trying to educate the transporters to do loading within the prescribed limits as it is not good for the vehicles, as it increases maintenance and downtime costs. However, they say they get paid by the weight and argue they won’t get enough freight if they don't overload. To hit the last nail in the coffin, drivers have their own arrangements to make a few bucks and overload more goods on the way. We try to educate transporters to use premium quality tyres as it is cheaper in the long run, bringing the cost per mile down. The problem is they always say the initial cost is expensive, and since they are overloading anyway, the more expensive tyres will also burst, meaning they they give around the same service as a Chinese tyre does. Of course, under these conditions a major issue is a lack of retreadable casings.”
Hamza continues by giving some insight into approach of the owners of passenger buses to tyre management. “They use tyre size 11 R 22.5,” he explains. “There is a lot of competition in the bus transport industry because of which buses go up to speeds of more than 120 km/h and get off the highways to overtake. They drive pretty rough, because they have to be on time no matter what happens. These operators are happy if their tyres last five months, but normally their tyres are blown off within 3 - 4 months. Despite this, there are a few good bus companies who go within speed limits and follow some regulations, but they follow a different strategy. They replace their tyres when they reach 50%, install new ones and sell the old ones, as the old tyre market is good and they receive a good amount. They also feel the tyre becomes week after 50 % wear, and the best option is to replace.”
A key problem for retreaders, explains Hamza, is the fact that the majority of the transport industry operators in Pakistan are not that well educated, do not want to learn and prefer to keep doing what they have always been doing.
“The sad part is that the premium quality brand importers and dealers don’t even support us,” he says. “They think they will lose their business if retreaders start retreading their tyres. On the other hand, we are always supporting them and educating customers of the benefits of premium tyres, but they don't even tell their customers that there is something called retreading.”
According to Hamza, a number have companies have set up retread plants in Pakistan, but most closed within three to four years. Sultan Enterprises are hopeful that things will get better in the coming years and the company continues in its efforts to educate transporters in the benefits of retreading.
In the meantime, however, Hamza says he is looking to continue in the retreading industry by working in other markets and is actively seeking employment in the retreading sector anywhere in the world.