2010 Investigation in China's Tire Retreading Industry

Dec. 21, 2010 - PRLog -- www.cri-report.com - In order to know about the current situation of China's tire retreading industry, China research and Intelligence conducted investigation among many enterprises in China's tire retreading industry and interviewed some experts during October to December 2010.

There are thousands of enterprises in China's tire retreading industry with the average tire retreading volume of less than10,000. China research and Intelligence investigated hundreds of those enterprises covering most of the leading enterprises in the industry. The research shows that China's tire retreading industry has low market concentration. In 2009, the market concentration of the top 10 enterprises was below 20%, while the utilization rate of production capability in many enterprises was fairly low,which was even less than 50% because since 2009, the increase in the prices of raw materials like rubbers has led to cost increase while the fierce market competition has made enterprises fail to transfer costs by raising prices.

Major Findings

Report on China's Tire Retreading Industry, 2010-2012
http://www.cri-report.com/230-research-report-on-china-s-...

Through this investigation, China Research and Intelligence found out that the technical merit of China's tire retreading industry was increased over that in the previous years now. Some enterprises have begun to formulate stringent quality standards and enhance the production management system. However, many small enterprises get orders just through the price war. The annual retreading volumes of some enterprises are only2,000-3,000 with the annual income of just CNY 200,000-300,000.

In the interview, most enterprises are all optimistic about the development prospects of China's tire retreading industry mainly due to constant and rapid growth of China's reserve number of cars in recent years and cost saving for car owners to use retreaded tires. Thus retreaded tires are gradually accepted by Chinese car owners.

From the interviews with experts conducted by China Research and Intelligence, it is known that the positive prospects of China's tire retreading industry mainly lie in two aspects, one of which is the pressure from insufficient natural rubber resources and increasing demand for rubber in China's tire industry. In terms of the current growth rate of China's tire industry, the natural rubbers in the whole world will still fail to meet the demand in the Chinese market in 10 years. So the development of the tire retreading industry is an important way to deal with the bottleneck of insufficient natural rubber supply.The other reason for developing the tire retreading industry in China is the pressure from environmental protection. In2009, the number of scrapped tires in China exceeded 200 million.

Currently, the comprehensive utilization of scrapped tire resources in China mainly includes the following ways:

   1. Produce reclaimed rubbers by making use of scrapped tires. Because of low profit, high labor intensity, long production process,severe energy consumption and serious environment pollution, reclaimed rubber output has reduced year by year in developed countries. In China, the production of reclaimed rubber is still a major way for the reutilization of scrapped tires with annual production exceeding 100 million tons.

   2. Produce vulcanized rubber powder by making use of scrapped tires. Compared with traditional reclaimed rubber, current rubber powder production creates no secondary pollution with high tire utilization rate. The rubber powder manufacturing industry is still in the early stage in China and its annual consumption of scrapped tires is limited.

   3. Tire retreading. The general tire damage is the wearout of wheel tread. Hence tire retreading is a major way to make use of worn tires. A tire can be retreaded for many times and its service time prolongs at least 1-2times, if it is normally used and well maintained. Tire retreading not only prolongs the service time of car tires, promotes the reduction of scrapped tires, but also reduces environment pollution.

   4. In addition, other approaches for dealing with scrapped tires include decomposing the tires at high temperature, landfilling them and using them for ornaments and fuels, all of which either consume few scrapped tires or create serious environment pollution, so they fail to be the major approaches for scrapped tire disposal. From the perspective of circular economy, tire retreading should be firstly taken into consideration for the recycling of scrapped tire resources, and then followed by other approaches.

Currently, the annual tire retreading rate in China is less than 10%, lagging far behind that in developed countries. By2009, China had become the world's largest new car market with increasing demand for the tire market.

Seen from the views of all the parties,China's tire retreading industry enjoys good prospects. It is predicted that the annual growth rate of China's tire retreading industry will maintain 10%-20%in the next few years.

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China Research and Intelligence is a market research company based in Shanghai, China. More information can be viewed on website: http://www.cri-report.com.