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China Research and Intelligence: Tire Retreat Volumes in China Will Reach 15 Million Strips in 2009

www.shcri.com --With the increase holding number of the automobiles in China year by year, the old and scrap tire outputs will keep grow at the speed of 10 to 20 percent annually, which has become the major source of the solid waste pollution. There are many means to use the tires cyclically, in which retreat is one of important means. The retreat tires maintain the original shape and physical features and cost little resources and labor forces. However, the tire retreat industry is developed slowly in China.

 

 

In 2008, near 200 million strips old and scrap tires were produced in China, only 11.5 million strips of which had been retreated.

 

 

In China, many consumers misunderstand the tire retreat industry. For example, they hold that it is unsafe to use the retreat tires; the retreat tires do not wear resistance, drive fewer mileages and unsuitable to the high temperature etc. Besides, partial Chinese media report the tire retreat industry untruly, such as small workshops, illegal operation, time bomb and sudden huge profits etc. Under the influences of these factors, Chinese tire retreat industry has showed the slow development tendency for more than 10 years.

 

For the pollution and recycle utility of the old and scrap tires, China is short of corresponding regulations and policies at present. On the one hand, the mass burning and deserting the old and scrap tires will cause serious environment pollution. On the other hand, the mass burning and deserting the old and scrap tires will result in the serious raw material shortage for Chinese old and scrap tire processing enterprises.

 

Although the financial crisis affects the global economy, yet it is an opportunity for Chinese tire retreat industry. John. Liu, an analyst in the rubber and tire industry of China Research and Intelligence, holds that more consumers will tend to choose the economical retreat tires under the influences of international financial crisis. Besides, the influences of the international financial crisis on Chinese tire retreat industry will be a wide range. Some small tire retreat enterprises will be closed down because of the backward technologies and poor operation capacity. Some strong tire retreat enterprises, especially the affiliated tire retreat enterprises of the tire manufacturers, however, will develop fast. The concentration of Chinese tire retreat industry will be enhanced. 

 

Chinese tire retreat enterprises have two major operation models: first, the tire retreat enterprises purchase the old and scrap tires and then sell then after retreat; second, the tire retreat enterprises retreat the old and scrap tires from the transportation companies and then charge the retreat fees from the customers. The enterprises of the former operation model usually lack the old and scrap tires. Therefore, there is a new development tendency in Chinese tire retreat industry, namely, many tire manufacturers are engaged in the tire retreat industry making the most use of its resource advantage. Compared with the simple tire retreat enterprises, the affiliated tire retreat enterprises of the tire manufacturers have more and huge advantages.

 

The world’s three tire giants Michelin, Goodyear and Bridgestone had entered Chinese tire retreat industry, in which Michelin is the earliest one involved in Chinese tire retreat industry. In September 2005, the first tire retreat factory of Michelin in China went into operation in Shanghai, which means the tire retreat plan of Michelin in China was officially set up. In January 2009, Bridgestone (China) Investment Co., Ltd. officially set up the tire retreat development department. Chinese domestic outstanding tire manufacturers, such as Triangle Group, have or planning to enter the tire retreat industry and explore the profit growth point.

 

John. Liu holds the views that the tire retreat volumes will be increased by 30% to 15 million strips in 2009 compared with 2008, which will reach to 19 million strips in 2010. From 2009 to 2010, Chinese government increases the investments in the fixed assets like railways and highways so as to maintain the economic growth. Meanwhile, the demand and holding volumes of the construction machinery in China are increased. It is predicted that the retreat tires of the construction machinery will become the hotspot in Chinese tire retreat industry in recent two years, which is worth to pay attentions for the investors. 

 

Source: China Research and Intelligence

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