A White Paper to re-launch retreads
With the new edition of the "White Paper on Retreaded Tires" AIRP takes a good look at the retread industry, highlighting not only the critical issues facing it and the great opportunities it offers, but considering it also as a perfect example of that "circular economy" which is soon to become the reference model for the future
It is common knowledge that the tire retreading sector is going through a very serious crisis, and the causes that for several years now have been placing retreaders on a downward spiral are just as clear. Nevertheless, it may be useful to collect data and assessments on the industry, take an honest look at the industry’s situation, pull some strings, glance at different scenarios and outline possible future prospects. This is what AIRP (Italian Tyre Retreaders Association) did, producing its "White Paper on Retreaded Tires", making it public last June 22nd at the Hotel Nazionale in Rome.
Retreads falling, despite environmental and economic benefits
The data published in the book paint a gloomy picture of the situation in Italy: from 2007 to 2015 the Italian market for truck retreads (segment which constitutes nearly the whole of the industry) dropped from 760,000 units to 432,000, a 43.2% slump that is now threatening the very survival of an industrial sector that includes not only large manufacturers and retailers, but also small and medium-sized retreaders, raw material suppliers and producers of retreading equipment: a business framework that is so typically Italian, one that makes up a precious cultural, technical and professional heritage.
A market decline taking place in spite of the great environmental and economic benefits that the product offers: according to data published in the White Paper, in 2015 alone money spent on retreads dropped by over 69 million euro, a figure based on the difference between the purchase of new tires and a retreaded equivalent. It is estimated that retreads can reduce CO2 emissions by approximately 30% compared to the production of new tires, saving about 70% of the original tire materials . According to AIRP, Italy saves every year, on average, 107 million liters of oil and 30,000 tons of other strategic raw materials such as natural and synthetic rubber, carbon black, textile fibers, steel and copper. Every year, thanks to retreads, it is also possible to avoid disposing of over 30,000 tons of tires into the environment. All these benefits could clearly increase if retreads market shares were higher.
Retreading as a new economic model
A broader consideration of the issue points to tire retreading as a solution that should be promoted on the market. One of the main challenges facing the global industry is reconciling economic and environmental sustainability. We live in a world where production efficiency cannot overlook the need to contain the consumption of energy and raw materials, nor ignore the social and environmental impact of its activities. In this scenario, a circular economy strategy devoted to completely reusing a product and its components, as well as eliminating large quantities of waste and scrap, is paramount. Tires have been at the forefront of remanufacturing policies for nearly a century, well ahead of all other automotive components as well as recent laws and regulations favoring the reuse of vehicle parts, thus becoming a viable alternative in terms of sustainability, in both economic and environmental terms. The risk posed by the steady sales decline, is that this important advantage could be lost, and with it the thrust of technological innovation, which has historically characterized the sector, especially in Italy. On the other hand, a huge waste of technology is created. Giving up on retreads means dumping great technological knowledge and achievements in landfills, literally! The high technological content and the value of existing retreads could be even greater in the "intelligent" tires of tomorrow.
Institutions, specialists and the industry as a whole agree: the sector has a strategic role to play
Considering the economic and environmental benefits, AIRP, on the occasion of the presentation of the 2016 White Book, asked for a greater awareness and concrete support for the tire retreading industry. Besides AIRP chairman Stefano Carloni, a significant presence was that of Chiara Braga, Member of Parliament and Head of the environmental office for the Democratic Party, Maurizio Vitelli, Director General for the Department of Motor Vehicles, and Carlo Maria Medaglia - Head of the Technical Secretariat of the Minister for the Environment, and protection of Land and Sea (who participated via teleconference), which demonstrated the interest of the institutions towards the sector. Further participants were Giovanni Corbetta, director of Ecopneus, and Fabrizio Fraioli owner of Fraioli Transport, who spoke about the benefits of retreads, to the ELT network and the commercial trucking industry respectively. Finally, no less symbolic was the participation of Stefano Parisi, Bridgestone South Region Managing Director, and Lorenzo Rosso, President and CEO of Michelin Italy, who intervened not only in support of their activities in the field of retreaded tires, but also to bear witness to the crucial role crucial that retreads can play in the industry. In fact, without the prospect of offering more lifecycles to their tires would mean having to compete against the low cost tires that are currently flooding the world markets: these are “non-retreadable, disposable items that leverage low costs”, said Stefano Carloni. "This is a key element for many transporters when replacing tires, one that guarantees immediate savings. It would be advisable instead to make sure that end users understand that non-retreadable low cost products are a fake source of cost saving. In fact, paying close attention to the issue, it is quite evident that multiple life cycles of quality products guarantee greater economic benefits".
"Safety and reliability are at the heart of the retread offer" was the comment made by Lorenzo Rosso: "two are the fundamental factors: design and thorough inspection. Retreadability is not an option but a key element when it comes to producing a suitable casing, one for which manufacturers are constantly developing their casings, something that could prove useful even for new tires".
"We are strongly convinced that tire retreading can become the founding pillar of a Circular Economy System, an increasingly popular concept around the globe - said Stefano Parisi – a production strategy centered around fully reusing a product as well as its components, eliminating huge quantities of waste", highlighting how the sector, in a context of global economic and industrial restructuring, will necessarily have to promote effective resource management policies in the coming years . Furthermore, as highlighted also by MP Chiara Braga: "The tire retreading sector is a symbol of what a circular economy should be like, a production model that effectively addresses the issue of efficient use of resources and raw materials, as well as the opportunity of reducing waste. What has recently emerged, is the need to address the whole lifecycle of a product starting from the designing stage. And retreads play an emblematic and significant role in all this as it represents a perfect example of circular economy".
Giovanni Corbetta reached the same conclusions: "In Italy, every year, 400,000 tons of ELTs are created. Thanks to the retreading industry, it is now possible to reduce the management of such a huge amount of potentially hazardous waste, reducing at the same time the consumption of raw materials and the use of resources, thus benefiting the environment. Throughout the automotive industry, re-manufacturing is a growing practice and an essential element for the life cycle of vehicles, the environment and the economic sustainability of the industry, not to mention the management of scarce and expensive resources. Backing away from retreading practices means to deny one of the best practices in a circular economy".
But if, from an institutional point of view, the matter involves an economic model for the future, for the daily struggles of an average business operator, retreading can represent the key to efficiency and profitability: "For a 'trucking company like ours, the most difficult thing at the moment is to make ends meet, "said Fabrizio Fraioli. "Saving money in terms of cost-km, is a key factor if one is to remain competitive in this sector. That is why retreaded tires can be a great ally: the economic benefits are immediate, saving between 30% to 40% compared to the purchase of new tires, an advantage that multiplies over time, because tires can be retreaded several times guaranteeing continuous savings. Some of our vehicles have traveled up to 500,000 km with the same tires, retreaded several times" concluded Fraioli.
Among the possible initiatives suggested in the White Paper, a popular one looks at a tax credit on retreads, favoring the many users of such products (100,000 transport companies just in Italy). "There is still room for action," said Carloni "Tax credits, already applied in other areas, can support and promote the activities of many retreaders". What impact AIRP’s activities will have remains to be seen, at least it is starting to create some waves: in fact, after the White Paper’s presentation event, in-depth meetings at Ministerial level have been planned, which - we hope - could be decisive in obtaining the needed support measures for the sector.