Retreading, many opportunities to be seized
Airp General Assembly
The Covid emergency is casting new shadows on the retreading market; however, there is no shortage of opportunities to support the sector. This was discussed by AIRP members during the Annual Assembly.
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An unusual meeting, in a reduced format due to anti-Covid measures, is what AIRP held on 2 October at the company's head office. This year's annual retreaders' meeting got underway amidst problems to be tackled, and new opportunities forming on the horizon, with various proposals to support the environmental benefits of retreading practices.
During the opening report, the president of the association, Stefano Carloni, took stock of the trends sweeping through the retreaded tire market which, after a slight recovery produced by the introduction of excise duties on low cost Asian tires, has returned to its old ways recording heavy losses, greater in the first half of 2020, even when compared to the general collapse of the national GDP. The general picture, however, "contains operators that have suffered modest losses, while others have more than halved their production, at least during the lockdown", as Carloni explained. Significant losses were witnessed also in the sale of retreaded car tires, while an interesting fact emerged from the truck segment, namely that sales drop for mold-cure retreads was twice that of pre-cured tires, an aspect that according to Airp’s president "may be due in part to the arrival of new sizes (315/70 22.5 and 385/55 R22.5) and the proliferation of many brands with significant size differences, making it easier to work with pre-cured products than mold-cure retreads". The situation remains difficult mostly because of the situation the Italian road haulage industry finds itself in, caught between competition from foreign operators and increasingly compressed margins; in addition to this, “products and services offered with a strong focus on purchase price rather than correct management, low mileage costs and the environment add to the woes of the sector” comments Carloni.
To complicate matters even further, the reduced number of ELTs collected is making life difficult for many tire specialists and retreaders, raising serious concern in the supply chain, especially in view of the upcoming winter tire change. This issue, therefore, will require AIRP and the other trade associations to make an urgent commitment to demand prompt solutions raising the problem at a national level. However, for Carloni, even in the face of these difficulties, there is no shortage of opportunities to try to help the sector: "On a political level, we remain anchored to the concept of circular economy - explained Carloni. From a strictly regulatory point of view, only a short time ago, a huge step forward was made with the transposition by Italy of the package of European directives on the circular economy. An important step, although it may appear more formal than substantial, which updates a series of objectives and principles indicating some possible tools to promote virtuous practices. This step, though, must be necessarily followed by other vital measures needed to implement a reward system for eco-friendly behaviour now long overdue". There is no lack of opportunities to act on behalf of the sector," stressed Carloni. A possible solution would be a tax credit in favour of end users. This would undoubtedly offer an important leverage on the market, concretely enhancing the inherent virtuosity of the retreading sector". Carloni also pointed out that the need to enforce the mandatory 20% share reserved for retreaded tires on vehicle fleets reserved for public administrations and public service operators. This is a provision contained in the 2002 Financial Law which was dictated essentially by environmental issues, but which, as things stand, considering the current crisis, acquires even greater importance as it also allows significant savings in managing public fleets and public spending. "Unfortunately," remarked Carloni, "this provision is being disregarded by the very bodies obliged to apply it. It would therefore be appropriate that public administrations scrupulously observe the 20% quota, which is certainly not too high. France, for example, has recently made the choice of using only retreaded tires on all State-owned vehicles (with the sole exception of military and emergency service vehicles). In order to guarantee the effective application and effectiveness of this measure, Airp reaffirmed the need to introduce an obligation to verify any purchase made, providing, at the same time, for a system of sanctions in the event of non-compliance with the rule".
Airp’s General Assembly saw, among other things, the presence of Gian Primo Quagliano, President of the Promotor Study Centre, who presented a report on the economic scenarios in the light of the effects of Covid-19. Mr. Quagliano pointed out how the pandemic hit our country at a time when the previous crisis, which started in 2008, had not yet been overcome. "The Gross Domestic Product at the beginning of this pandemic," Quagliano said, "was still 4% lower than 2007. Therefore, the industry as a whole is called upon to return, not to pre-Covid scenario, but to pre-2008 conditions. This is the target, and both the national economy and the retreading sector must do everything possible not to miss it". Quagliano pointed out that the recovery fund also offers many opportunities, and stakeholders should bear in mind and perhaps demand additional government incentives for purchasing new cars, which have already produced positive results on the market.
The Assembly continued with an update on institutional activities by Guido Gambassi, Deputy Secretary of Airp. In addition to an update on the composition of the board of the European retreaders' association (Bipaver), Gambassi himself now being the vice-president of this association, it was pointed out that Italy has recently implemented the "Circular Economy" package (i.e. the European directives approved in May 2018 by the European Council), which provides for ambitious recycling and waste reduction targets for EU countries, with a view to promoting a more general transition to the circular economy. "This is an important step - commented Gambassi - which must be used to implement tangible measures in favour of sectors such as tire retreading, which have always set themselves as a perfect example of the principles guiding a circular economy. Our task in the coming months is to make sure that such vital principles are put into action". At European level, a new directive is expected to deal with eco-design, as this would offer the possibility of including tires among the products designed to be repaired, rebuilt or reused in multiple products.
Next up, Brenno Benaglia, Airp's technical representative within Bipaver, intervened with a report on the new European legislation on tire labelling, which aims to provide consumers with better information on fuel consumption, safety and noise levels. "However, the lack of a labelling system for heavy duty retreaded tires - Benaglia stressed - often frustrates the efforts of trade associations to demand incentives for retreading as an environmentally friendly practice. Work is therefore underway to update labelling criteria to include retreaded truck tires, with a certification procedure that must prove economically sustainable for small and medium-sized companies". Next, Massimiliano Malatesta, from Malatesta Pneumatici, took the stage and highlighted a series of issues that are holding back the retreading sector, particularly on cars, despite the great opportunities represented by a new ecological awareness quickly developing. As emerged from the final debate, in this area too tax credits could be the right solution to draw the consumers' attention towards retreaded products, opening a new phase for the entire sector. At the end of the proceedings, a video of the first edition of the Recircle Awards, the prize-giving event organised by Valebridge Media Services with Retreading Business to enhance excellence in the retreading and recycling business, was presented at the end of the session, offering all participating companies an important international showcase.