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2010 Investigation in China's Tire Retreading Industry

2010 Investigation in China's Tire Retreading Industry
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General Introduction

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.

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.

Research Report on China's Tire Retreading Industry, 2010-2012
The results from this research on China’s tire retreading industry have been added to Research Report on China's Tire Retreading Industry, 2010-2012 issued by China Research and intelligence in December 2010.
In 2009, China’s tire output exceeded 650 million and the number of waste tires was 240 million. In 2009, the number of retreaded tires in China reached about 14 million, increasing by about 16.70% over 2008. However, China possessed a tire retreading market with low concentration. According to incomplete statistics, there were only less than 20 tire retreading enterprises with the annual output exceeding 100,000 in 2009, while there were thousands of tire retreading enterprises in China with the annual output of about 25 million; there were thousands of pine tar and rubber powder producing enterprises with the annual pine tar output of 3.50 million tons and annual rubber powder output of 1 million tons.

As the retain number of cars increasing annually in China, the waste tire production maintains an annual growth rate of 10%-20%, having become a major solid waste polluter. Retreading is one of the many important approaches for tire recycling. Retreaded tires keep their original shapes and physical properties, but consume little energy and labor. However, many reasons lead to the slow development of China’s tire retreading industry.

First of all, as for pollution and reutilization of waste tires, there have been no relevant laws or policies in China currently. On the one hand, incineration and disposal of a large number of waste tires causes not only great pollution to the environment, but also a serious waste of resources; on the other hand, it leads to the severe deficiency of raw materials for waste tire processing enterprises in China.

Secondly, due to the misunderstandings, many drivers tend to use tires until they become scrap ones and do not recycle the tires according to wear limit marks, leading to not only unsafe driving but also the loss of tire retreading value because of overuse.

Finally, customers in China generally hold many false ideas towards the tire retreading industry: it is not safe to use retreaded tires; retreaded tires are not wearable with few tire mileages. In addition, some Chinese media continuously makes distorted reports about the tire retreading industry and adds such titles as “small workshop”, “illegal operation”, “time bomb”, “excessive profits” to the tire retreading industry, leading to customers’ psychological rejection of retreaded tires.

Influenced by these integrative factors, China’s tire retreading industry has always presented slow development trend in recent 10 years. In 2009, the waste tire retreading rate in China was less than 10%, far lagging behind the standards of developed countries.

With the increase of retain number of cars in China, the number of private cars increases, and cars have transferred from luxuries to commodities. For car maintenance, most Chinese car owners rapidly transfer from “new-oriented” to “practical-oriented”, which is beneficial to the development of the tire retreading industry.

With the improvement of regional road network construction in China, road transport has become the uppermost way in China’s transportation industry. And with the development of China’s highway transport industry, usage amount of tires increases, creating favorable conditions for the development of tire retreading industry.

In 2009-2010, in order to maintain economic growth, the Chinese government drastically increased investment in road, rail and other fixed assets. The demand and retain number of engineering machines in China was increasing. It is estimated by the China Research and Intelligence that the annual demand of off-the-road tires in China will reach 4-5 million in the next few years and the annual market scale will be over USD 1 billion. In China, the service lifetime of retreaded off-the-road tires is about 70% of the new tires, and their prices are only 40%-50% of the new ones, however. It is predicted that the annual value of off-the-road tire retreading market will exceed USD 100 million with broad prospects.

It is forecast that Chinese and overseas investors will enter China’s tire retreading industry successively in the next few years. These investors will include not only persons solely investing in the tire retreading industry, but also tire manufacturers, tire trading enterprises, etc.

From this report, readers can acquire the following and more information:
-Development of China’s tire retreading industry
-Market competition of China’s tire retreading industry
-Supply and Demand of China’s tire retreading industry
-Key enterprises in China’s tire retreading industry and their operations
-Investment opportunities of China’s tire retreading industry
-Development trend of China’s tire retreading industry

Following persons are suggested to buy this report:
-tire retreading enterprises
-tire manufacturers
-tire trading enterprises
-tire retreading equipment manufacturers
-investors and research institutions concerning China’s tire retreading industry
Research Report on China's Tire Retreading Industry, 2010-2012

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1. Current Situation of China’s Tire Retreading Industry,2009-2010

1.1 Overview of China’s Tire Retreading Market

1.1.1 Development Course

1.1.2 Development Status

1.2 Development Environment of China’s Tire Retreading Industry

1.2.1 Policy Environment

1.2.2 Macroeconomic Environment

1.2.3 Social, Cultural and Natural Environment

1.3 Competition of China’s Tire Retreading Industry


2Analysis on Development of Related Industries of China’s Tire Retreading Industry, 2009-2010

2.1 China’s Tire Industry

2.1.1 Development Status

2.1.2 Development Forecast

2.2 China’s Tire Retreading Equipment Industry

2.2.1 Current Situation

2.2.2 Development Trend

2.3 Major Customers of China’s Tire Retreading Industry

2.4 Prediction on Development of China’s Tire Retreading Industry, 2011-2015

2.4.1 Market Scale

2.4.2 Technology Trend

3 Tire Retreading Market Status in Some Regions of China, 2009-2012

3.1 Shandong Province

3.1.1 Development Status of Shandong Tire Retreading Market

3.1.2 Market Competition Status

3.1.3 Prediction on Development Trend

3.2 Guangdong Province

3.3 Beijing

3.4 Shanghai


4 Analysis on Key Enterprises of China’s Tire Retreading Industry, 2009-2010

4.1 Zhaoyuan Pengtai Tire Retreading Co.,Ltd.

4.1.1 Corporate Profile

4.1.2 Operations

4.1.3 Development Strategies

4.2 Shangdong Rongfeng Rubber Co., Ltd.

4.2.1 Corporate Profile

4.2.2 Operations

4.2.3 Development Strategies

4.3 Yisheng Group

4.4 Juzhou Hongwei Rubber Co., Ltd.

4.5 Quntai (Guangshui) Tire Retreading Co.,Ltd.

4.6 Weihai Triangle Tire Retreading Co.,Ltd.

4.7 Ningbo Hualin Rubber Industry Co., Ltd.

4.8 Leping Changxing Tire Retreading Co.,Ltd

4.9 Chongqing Chaoke Industrial Co., Ltd.

4.10 Sichuan Xindu Sanyi Tire Co., Ltd.

4.11 Beijing Jinyuntong Large Size TireRetreading Co., Ltd.

5Analysis on Development and Investment of China’s Tire Retreading Industry, 2011-2012

5.1 Prediction on Development Trend of China’s Tire Retreading Industry

5.1.1 Overview

5.1.2 Analysis on Technology Trend

5.1.3 Development Proposals

5.2 Prediction on Investment of China’s Tire Retreading Industry

5.2.1 Analysis on Investment Opportunities

5.2.2 Analysis on Investment Risks


Selected Charts

Chart Output of Tires in China, 2005-2009

Chart Retain Number of Cars in China,2005-2010

Chart Number of Waste Tires in China,2005-2010

Chart Evaluation of Tire Retreading Costs

Chart Introduction of Main Techniques of Tire Retreading in China

Chart Sales Volume of China’s Engineering Machinery Products, 2007-2009

Chart Tire Retreading Volume in China,2005-2010

Chart Market Scale of China’s Tire Retreading Industry, 2005-2010

Chart Prediction on Market Scale of China’s Tire Retreading Industry, 2011-2015