The retreading industry is in a time of great change that can benefit those retreaders who have the ability to improve technology, bring down cost and know the needs of the customer.
``Everyone is looking at ways to add value to what was once thought of as just retreading a tire,'' said William Sweatman, president of Marangoni Tread North America, a subsidiary of Marangoni S.p.A. of Verona, Italy. He spoke at the Clemson University Tire Industry Conference, held Feb. 26-28 in Hilton Head.
Retreading has, in fact, made new tires better, as retreadability is a big factor in tire buying for truck fleets, he said. ``In some ways, it's caused tires to be over-engineered.''
While there has been some drop in the number of tires retreaded-along with a decline in retread plants operating-in the U.S. over the past several years, he noted that in 2002 there still were more than 21 million retreaded tires sold.
The segment had sales topping $2 billion that yielded ``cost savings in the billions of dollars for the entire transportation industry,'' he said.
Consolidation in retreading continues to be a trend, he said. Four rubber companies own and operate 13 percent of all retread plants in the U.S. and account for 22 percent of all truck tire retreads. The top 50 companies own 28 percent of plants and produce more than half the retreaded tires.
Competition means that industry players must understand what customers want and be able to provide it in an economical way.
``Customers want reliable miles at a reasonable price,'' Mr. Sweatman said.
A number of outside factors, however, are impacting retreaders and their customers. These include such things as rising raw material prices, cheap new tire imports from Asia, rising customer expectations, the bad economy, a truck driver shortage, changing government regulations and maintenance costs.
Mr. Sweatman related how the industry faces what he calls the ``perfect storm,'' with spiking petroleum prices causing raw material costs to increase and fuel prices to jump-with the latter of particularly grave concern to fleet customers. The Marangoni executive even had one customer who stopped buying tires altogether. The customer's reasoning was: ``I can deliver more on bald tires than on an empty tank.''
Such negative factors have resulted in an increase in customer bankruptcies and a growth in outsourcing, with such things as full-service leasing and contract maintenance becoming more common.
For retreaders, the challenge becomes improving quality while bringing down cost-something that's of interest to all customers.
He pointed to the potential benefits automation could bring to the industry. ``It used to take 50 minutes to make a new truck tire and 50 minutes to retread a tire,'' Mr. Sweatman said. ``Now it takes 15 minutes to make a new tire and still 50 minutes to make a retread,'' as retreaders spend more time with inspections.
``New technology will give the industry a real opportunity in this area,'' he said.