The retreading sector looks ahead
The introduction of anti-dumping duties has finally provided some breathing space for the retreading industry, but much remains to be done to enforce the principles of a circular economy and relaunch the sector: Italian retreaders discussed it during their annual assembly
In 2018, the annual AIRP general meeting was held in a climate of expectation for European duties on Chinese truck tires - which would be confirmed shortly afterwards. The 2019 event, on the other hand, which took place on October 4 in Rome at The Hive Hotel, was an opportunity to take stock of the situation following the adoption of antidumping duties and look at how much still remains to be done.
Further challenges expected
Current market trends were the starting point for the report by AIRP’s Chairman, Stefano Carloni, who highlighted that, from the second quarter of 2018, the provisional duties imposed by the Commission have led to a reversal of the negative trend experienced over the last 12 years: this fact in itself represents a remarkable achievement, but what was even more impressive was the immediate trend reversal in the following quarters which allowed Italian retreaders to offset the extremely negative figures recorded early in 2018 and close the year with an overall 1.7% increase. Certainly, things have been happening rather unevenly, with considerable differences in the ways the market reacted in different parts of the country, but the end result is certainly a demonstration of just how much the trade defence measures that we had hoped for so long were necessary for the sector. However, it is also important not to stop at first impressions, because a number of retreaders entertained higher expectations as far as the benefits of these import duties on the 2019 market trends; in fact, according to AIRP’s president: "What many are now asking is: why hasn’t the sector grown more after the introduction of the anti-dumping measures? In theory, this is what should have happened since the Commission has restored fair market conditions and the industry has every opportunity to express its full potential. In reality, though, we cannot do more than that. For one very concrete reason: customers require retreaded tires complete with casings, and we don't have the casings to retread - or at least we don't have enough of them to create a better offer. This is one of the collateral damages of Asian dumping". Furthermore, the market space that has been freed up following the anti-dumping measures on Chinese imports was soon filled, in part, by tier two and tier three brand tires, which contributed to limit the recovery in retread sales. So what can the sector do to guarantee a future solid and steady growth? Still according to AIRP’s president, implementing a circular model remains the main road to follow, hoping in a legislative framework designed to adopt its principles. "Eco-design is a concept that I find particularly important and symbolic in the context of a circular economy - said Carloni: designing a product that has a long life cycle and a low impact capable of being recovered and reused as many times as possible is crucial. Looking at tire retreading, we are well aware that, as things stand, only a small portion of the tires placed on the market are suitable to be reused in several cycles. How, then, can new production policies promote a circular economy in the specific case of tire retreading? First of all, through a system that certifies the durability of a product and favours a correct and transparent communication to the market. Downstream, this should translate into a shift of competitive factors, which would no longer rely solely on price but, above all, on product durability and quality". It is therefore a highly strategic issue, and perhaps still difficult to translate into concrete actions, but one that needs to be monitored with great attention in view of promoting policies and measures aimed at discouraging the birth of disposable commercial strategies. Furthermore, Carloni pointed out, "while in the case of truck tires, high duties have been imposed to protect the European market from low cost products, car tires are still under attack from disposable budget products which are having a profound impact on the entire supply chain"; this makes it all the more important to draw the attention of public decision-makers and demand a preventive stop to everything that is designed to offer low prices and frequent replacements.
Not all proposals, however, need to go through a legislative process, as AIRP also intends to make efforts to enforce existing rules in support of retreaders: this is the case with the 20% quota of retreaded tires which all local public transport fleets and companies providing public services are legally required to have since 2001; despite the legal obligation, checks and inspections are still too few, and the same can be said about sanctioning measures, thus it would be appropriate to fill this gap first.
"We therefore have, as always, several issues to deal with," concluded President Carloni, "but I think it is worthwhile remembering that all the things we do have a common denominator, promoting a culture of product quality and value.
New projects ahead
After the President's report, Brenno Benaglia, AIRP technical consultant, presented an update report on the activities carried out with the European association. One of the main activities at European level relates to tire labelling, and current regulations are being updated to include retreaded tires; Bipaver (Retread Industry’s Trade Association) will propose at European level that labelling be optional for retreaded tires. As far as cold retreading is concerned, no particular problems are foreseen, while the hot retreading certification process could be particularly burdensome, which makes it important to closely monitor future steps. It may also be useful to seek the direct collaboration of other players such as raw material distributors and mould manufacturers. The issue of labelling, Benaglia said, can still offer opportunities, as it should help to obtain EU funding aimed at promoting a circular economy. With regard to winter approvals for retreaded tires, Bipaver has recently asked for simplified testing procedures, but for the moment the request has been rejected by UN ECE.
Referring to the main institutional activities of the Association, Guido Gambassi, from the AIRP secretariat, focused in particular on the study "Circular economy at work: the case study of retreaded tires in Italy" commissioned to I-Com (Institute for Competitiveness), an independent foundation specialising in economic analysis. The study, recalling the theoretical and political principles of a circular economy, analyses the current situation and makes some specific proposals in support of the sector, clearly addressed to public decision-makers. Of particular interest is the study of the economic spin-offs resulting from direct and indirect demand, induced demand and employment opportunities that would result by establishing a tax credit on the purchase of retreaded tires. A further proposal by the study is to strengthen Green Public Procurement, i.e. sustainable procurement by public administrations, by increasing the current retread purchase quota by public transport fleets. In this scenario, the event organized in Rome in September, represented the perfect opportunity to work on the proposals to be submitted to the institutions.
David Wilson, publisher and journalist of the international magazines Retreading Business and Tyre and Rubber Recycling, as well as a collaborator of Pneurama, also participated in the meeting. Wilson presented a series of proposals for a collaboration with AIRP in view of the next edition of Autopromotec, in 2021, ranging from conferences to new projects for the exhibition sector dedicated to retreading.