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GOOD ROADS, BETTER RETREADABILITY

Excerpts from an interview with Paulose Varughese, Director, Midas, one of Asia’s largest tyre retreading materials supplier.

Midas is Asia’s largest tyre retreading material supplier. How do you see the current Indian tyre retreading material market and how do you differentiate the Indian and western markets for tyre treading business?

The Indian tyre retreading market is steady but not growing. Due to general recession in transportation and the economy and radialisation there has not been much growth in the number of tyres being retreaded. The quality of material being sold in the market has improved and you are seeing a lot of smaller players shut shop. A lot of bigger companies like JK Tyres and Apollo Tyres have entered the market.

Western markets are very different and are going through a severe drop in volume of retreaded tyres. This is primarily due to the huge success of cheap Chinese tyres. Chinese tyres tend to be preferred by customers over retreads and since the casing in most cases is not retreadable they lower the number of casings available for retreading.

In which segment, passenger cars or commercial vehicles, do you see better growth trend in retreading business in India?

The fact is that there is no considerable growth in the passenger car tyre retreading segment as speeds go up and customers become more circumspect when it comes to using retreaded tyres. On the contrary, in the commercial vehicle segment the future looks good for retreading if the current trends continue.

What improvements/ upgradations are seen on the technological front that can enhance the quality of tyre retreading materials in India?

Tyre retreading materials need to be improved to suit radial tyres. Also, as you see, radicalisation is fast spearing in the Indian tyre industry. More importantly, the retreading processes and the machinery used by retreaders need to be improved. Only this can enhance quality. The process of improvement is certainly going on.

The price of raw materials, mainly that of natural rubber, has fallen in recent months. However, last year, the prices of NR touched record high levels. How do you tackle such price volatility in markets and what steps should be taken by concerned authorities to avoid such instability?

Authorities should not get involved in price fixing or managing. Prices are determined by market forces, which is the best and fairest way of setting prices. We are able to pass on the price increase and decrease to our buyers, who then pass on the changes to their customers. You can buy on futures markets or try to hedge risks or alternately buy on spot prices and then adjust prices accordingly.

What are the factors hampering the growth of retreading business in India, both in organised and unorganised sectors? What is the future of tyre retreading business in India?

Good roads and infrastructure will improve retreadability of tyres. High import duties and anti dumping duty on Chinese tyres have helped the retreading industry as Indian tyres have good casing strength.

By Sharad Matade

 

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