Report on the

retreaded tyre
industry in Kerala
A Research

Pulkit Goswami
STUDENT AT IMI, NEW DELHI

Contents
Executive Summary ................................................................................................................................................ 2
Acknowledgement .................................................................................................................................................. 2
Brief about RPSG Phillips Carbon Black Limited .............................................................................................. 2
Competitor Overview ............................................................................................................................................. 3
Retreaded Tyre Industry in India ............................................................................................................................ 3
Retreaded Rubber Types and Design ...................................................................................................................... 4
Literature Review ................................................................................................................................................... 4
Project Brief............................................................................................................................................................ 4
Project Title ........................................................................................................................................................ 4
Activities Involved ............................................................................................................................................. 4
Outcome expected .............................................................................................................................................. 4
Brief description of the concepts / models introduced in the study .................................................................... 4
Methodology Used ............................................................................................................................................. 4
Locations Visited ............................................................................................................................................... 4
Data Analysis and findings / results........................................................................................................................ 6
Interpretations and conclusions / summary ........................................................................................................... 20
Recommendations ................................................................................................................................................ 22
Limitations of the study ........................................................................................................................................ 22
Scope for future improvements............................................................................................................................. 22
References ............................................................................................................................................................ 23
Bibliography ......................................................................................................................................................... 23
Questionnaire ........................................................................................................................................................ 25
Experience & key learnings during the project..................................................................................................... 37

Executive Summary
The vision of RPSG Groups company Phillips Carbon Black is to be A trusted Global
player providing cutting edge solutions to our Partners and an exciting workplace to our
People, and in order to achieve that, the company wishes to know what the partners
perspective is towards the industry and its growth potential. This study was conducted to
understand the industry, how it is growing or de-growing, the kind of expectations the tread
rubber manufacturers have from the company and various other questions that were addressed
to all the entities in the downstream supply chain ranging from the tread rubber manufacturers,
the local/organised retreaders, to both private & public bus and truck fleet operators. The
diverse set of respondents gave a deeper understanding of the whole supply chain and how
have various factors like radialisation, the advent of Chinese tyres in the Indian market, the
poor road transport infrastructure in India have impacted the tyre retreading industry. The
findings and conclusions along with the recommendations mentioned herein would help the
company devise its marketing strategy accordingly. A primary study coupled with secondary
research was carried out to understand the future growth potential of this industry.

Acknowledgement
Brief about RPSG Phillips Carbon Black Limited
PCBL, a part of USD 2500 million (or 2.5 billion) RP-Sanjiv Goenka Group, has a business of
USD 500 million and four strategically located state-of-the-art plants at Durgapur, Palej,
Cochin and Mundra. PCBL today is India's largest and globally seventh largest carbon black
producer.
Set up in collaboration with a US company Phillips Petroleum, PCBL started production in
1962 with 14,000 metric tonnes (MT) of carbon black at Durgapur. Currently, it has a
production capacity of 4, 72,000 MT per annum in India, and involves a dedicated capacity of
Specialty Blacks of 40,000 MT per annum at Palej.
PCBL provides a complete portfolio of products to meet the specific end requirements across
Rubber, Plastics, Coatings, Inks and other niche industries globally. The Company has been
continuously reinventing itself in order to make the best in class products. Additionally,
PCBL's after sales service and strong technical support ensures a fiercely loyal base of
customers from around the world. PCBL has etched its global footprints and has a market
presence in more than 30 nations with decanting stations, warehouses located near customer
locations. A few of the Company's prized customers are CEAT, MRF, Michellin, Yokohama,
Birla Tyres, Goodyear, Sumitomo Tires, Bridgestone, Kumho Tires, among others.
PCBL has redefined its business by establishing captive power plants at each factory from the
off-gas or waste product from the carbon black manufacturing process thus creating a
sustainable green movement. The gas, a by-product of carbon black production, is harnessed
for generating electricity at the Company's Captive Power Plants (CPP), at Baroda, Durgapur,
Mundra and Kochi. That is why PCBL is the first carbon black company in the world to receive
carbon credits. The Company has heavily cut down on carbon and gas emission, and serves
green power to Large Private industrial units and State Electricity utilities.

From the pioneer plant at Durgapur in the East to Kochi plant in the south, Palej and Mundra
plants in the west - PCBL footprint spans across India. Wherever PCBL goes, the Company
becomes an integral part of the social eco-system. PCBL's more than 50 years' journey to be
the cleanest carbon black company is the result of meticulous planning and committed
execution.
Incorporated in 1960, PCBL started production in December, 1962 using the oil furnace
technology. This technology was the most widely accepted manufacturing process of carbon
black, patented by its then collaborator and world carbon black leader, Phillips Petroleum
Company, USA. Though the collaboration ended after a fruitful relationship, PCBL continued
to make considerable progress by making continued and sustained efforts through its
technologists, engineers and R&D Activities.
In the late 80s, the Company entered into a technical agreement with Columbian Chemicals
Company, USA, and updated its technology in order to gain flexibility, better product range,
production capacity and energy conservation.
Currently, PCBL has an installed capacity of producing 410,000 Metric Tonnes Per Annum
(MTPA) of carbon black along with green power capacity of 68 Megawatts (MW).
Make an infographic for the journey
http://www.pcblltd.com/aboutus/aboutus.php?container=11

About Kochi Plant

Kochi Plant
Location: Kerala
Established: 1984
Carbon Black Capacity: 40,000 MT/Annum
Captive Power Plant Capacity: 10 MW
Products Manufactured: All hard blacks
Markets catered to: South and West India, South-East Asia
Future Plans: Addition of 50,000 MT/Annum soft black line

Competitor Overview

Retreaded Tyre Industry in India

Tyre retreading is an established technology in the recycling of worn tyre carcasses. Indeed, the term
retread was introduced during World War II by ex-army officers summoned up on duty. About 8588%
of worn casings can be retreaded and deployed as fresh tyres, and if maintained properly, 80% of casings
that have been retreaded once can be retreaded again and reused. An effective functional tyre is made by
replacing the old tread with a new one by appropriate processing with suitable rubber compounds. A

correctly retreated tyre is able to provide the same mileage, rolling resistance and other operational
properties as a new tyre. The retreaded tyres are tested and their dependability and safety assessed
according to the specifications for automobile tyres, truck tyres, off-the-road (OTR) tyres and aircraft tyres
(taking into consideration, for example, the eventual extreme strsesses experienced by aircraft tyres).
Because of the guaranteed and reliable performances of retreaded tyres but at a lower cost than new tyres,
in 1993 the USA allowed retreaded tyres to be used on all government vehicles under a Federal
Acquisition, Recycling and Waste Prevention order. The foremost advantage of retreading is its cost
effectiveness, with a retreaded truck tyre costing one-fifth that of a new truck tyre. Tyre retreading is
friendly to the environment as an alternative to buying a new tyre. A considerable amount of energy
(equivalent to 84 litres of oil) is consumed in the manufacture of one new truck tyre, whereas 26.5 litres of
oil is used to retread a tyre. In the USA, 15 million truck tyres are retreaded, thereby saving 100 million
gallons of oil every year. In other words, retreading, via recycling and conservation, contributes to saving
Earths depleted resources.

(bannerjee book)

Retreaded Rubber Types and Design

Pre-cured conventional etc

Literature Review
Project Brief
Project Title
To assess the future market potential of the tyre retreading industry in Kerala in order to ascertain our role as carbon
black manufacturers and gain competitive advantage against other players

Activities Involved

Understand the tyre retreading industry

Collection of primary data as per the outcomes expected from the report, from tread rubber
manufacturers, retreaders, truck / bus fleet owners, and the Kerala State Road Transport Corporation
Collection of secondary data from various sources

Outcome expected

Understand the reasons for retreading being chosen over buying new tyres
Understand the advantages being seen by the end users of retreaded tyres
Understand the kind of threats the tread rubber manufacturers see / perceive in the market along with
their production estimates
Understand if there is a consolidation threat looming in the market and its effects on the growth of the
market

Brief description of the concepts / models introduced in the study

,jbngc

Methodology Used
A primary study was conducted to get the responses from the sample that was selected by the
stratified sampling method by dividing the whole set of probable respondents into various strata,
i.e., tread rubber manufacturers, retreaders, and the truck / bus fleet owners.

Locations Visited
The primary study conducted to get the responses required visits to various locations as the
entities were located in different areas throughout Kerala. The locations are mentioned below:

1. Manjeri The Payyanad Industrial Estate houses many Tread rubber manufacturers
2. Edamuttam One of the customers office was located in this area that is about 40
kilometers away from Thrissur
3. Thrissur The industrial capital houses some of the largest clients of RPSG Phillips
Carbon which made it an essential destination for interviews
4. Kalamassery Located within the Kochi city, this place has the maximum concentration
of retreaders
5. Willingdon Island This port island hosts the shipping yard and thus cargo carriers. A
large number of truck fleet owners are situated in this area.
6. Pallikkara Located within the Kochi city, this place has most of the private bus fleet
owners residence in this area
7. Mavellikkara This small city in Alleppey houses an Industrial estate (SIDCO) that has
some major tread rubber manufacturers and retreaders
8. Aluva With the regional workshop of the Kerala State Road Transport Corporation
located in Kochi, a visit was done to understand the market from the point of view of a
major consumer of retreaded tyres, while also understanding the growth in the number of
buses to be added by the Government in the next couple of years.

Data Analysis and findings / results

The interviews of the entities that lie in the downstream supply chain from a Carbon Black
manufacturer in the retreading industry were conducted. Their responses were recorded and
analysed separately in order to draw conclusions from the data points. This section is divided
into sub-sections consisting of the findings for each entity, namely;

The tread rubber manufacturers that use natural rubber and carbon black to
manufacture tread rubber in the forms mentioned in the initial sections
The retreaders who then physically after various inspection checks install this tread
rubber on used tyres
Truck and Bus fleet owners who are the end customers in this chain

We would start with the tread rubber manufacturers:

1. The respondents that were interviewed possessed the below mentioned pattern (Fig 1)
of production
Fig 1

Average Production Proportion (in %)

14%
26%
9%

51%

Truck/Bus Radials

Truck/Bus Bias Ply

OTR

Tractor

2. According to the tread rubber manufacturers that were interviewed, their customers
gave preference to the values mentioned in the order shown below in Table 1:
Table 1
Value Preference Order

Attribute

Quality

Reasonable Price

Credit Facility

Brand perception in the Market

Location / Proximity

After Sales Service

3. The decline as seen by the respondents ranges roughly from 0-50% in the sales.
4. All the respondents in the form of tread rubber manufacturers believe that consolidation
is bound to happen in this industry.
5. While none of the tread rubber manufacturers that were interviewed believed that there
is an increase in demand for tread rubber in the future for their business overall, 40%

of the respondents believe that the demand seen by the Agriculture (tractors) and OTR
segment is tied with the economy's growth.
6. According to the tread rubber manufacturers that were interviewed, the threats looming
in the market are as shown below in Table 2:
Table 2
Threat Criticality Order

Attribute

Radialisation is on the rise

Chinese Tyre Manufacturers are entering India with cheap prices

Increased mileage of tyres because of technological advancement

Poor road network in most parts of India that damage the tyre body

Capital intensive technology for retreading of radial tyres

Falling prices of tyres because of competition from Chinese tyres

Poor supply of Natural Rubber in India, India being a net importer

Recession

7. Although Silica maybe used as a filling material, but 100% of the respondents feel that
it could never replace carbon black.
8. Apart from the market in Kerala, these manufacturers supply their tread domestically
to Tamil Nadu, Madhya Pradesh, Maharashtra, Karnataka, Andhra Pradesh, Assam and
Gujarat. International markets include Sri Lanka and Turkey.
9. The profile of customers that the manufacturers which were interviewed cater to is as
mentioned below in Table 3:
Table 3
Types of Segments

Average Segment wise

distribution

Truck

42.5

Bus

21.5

Agriculture (Tractors)

18

OTR (Mining and JCBs)

11

Passenger

10. 60% of the respondents agreed to using SBR along with Natural Rubber
11. While all of the manufacturers that were interviewed were satisfied with the quality of
the Carbon Black that PCBL produced, 40% of the respondents weren't happy with the
overall procurement process with reasons ranging from non-availability of desired
grade to the price being higher than market standards.
12. The production pattern in the last two years as seen by the five manufacturers that were
interviewed is as shown below in Table 4 and Fig 2. There is a decline of about 4.47%
in the annual production of tread rubber over the last year.

Fig 2

4000

3600

3600

3500
3000

1680

2500

1704

2000

1100

1500

1412.8
800

1000
120

500

140

1349.6

528

540

0
Manufacturer Manufacturer Manufacturer Manufacturer Manufacturer
Average
1
2
3
4
5
Production
2014-15

2015-16

Table 4
Year

Average Production (in MT)

2014-15

1412.8

2015-16

1349.6

Decline (in %)
4.47

Let us now look at the findings from the interaction with the retreaders (both organized
and unorganized players).
1. As per the retreaders that were interviewed, the average life of a retreaded tyre (Fig 4)
is as mentioned below:
Fig 4

Average life for a retreaded tyre (in km)

90000
80000

81000
70833.33333

70000
60000
50000
40000

38333.33333

37833.33333

30000
20000
10000
0
Truck Tyres
Radial Tyres

Bus Tyres
Bias-Ply Tyres

2. Among the retreaders, the below mentioned tread rubber manufacturers were popular
due to the reasons mentioned herewith:

a. Midas was the most preferred among the retreaders visited with about 50% opting
for Midas due to its quality, availability, variety and brand perception in the
market
b. Tolins came second as a leading choice for bias ply tyres
c. The rest of the players in the market including Hitech, Eastern, Indag, Cochin
Rubber, Janatha Rubbers, TVS Treads were preferred because of various reasons
ranging from the tread being the owner's brand, to brand value to the extent of it
being better than that of Midas (in the case of Indag)
3. Amid tension in the market with apprehensions of demand going down, the retreaders
that were interviewed felt that they would see a rise in the number of tyres in the next
two years. A brief snapshot of the figures is given below (Fig 5):
Fig 5

Growth in the retreaded tyre industry (in %)

35
34
33
32
31
30
29
28
Growth in bias

Growth in radial

Growth in bias

Bus (in %)

Growth in radial

Truck (in %)
2016-17

2017-18

4. The reasons attributed to the average growth as expected by the retreaders visited
during the study were mainly:
a. Small retreaders are shutting shop due to increased competition in the market and
the need for quality and brand name has improved significantly
b. More and more vehicles are coming onto the road with better infrastructure,
greater need for transportation of raw materials
c. Growth of the automobiles sector would fuel this growth, however, due to the
nature of life cycle, the growth in the retreading industry is deferred by some time.
That is, there is a lag
d. One of the retreaders, although not looking towards building any new plants has
one of his plants running at half the design capacity
e. The unorganised sector's players go together to pitch to the fleet owners to acquire
more and more customers, in some cases educate them to the benefits of
retreading their tyres
5. Out of the retreaders that were interviewed, 83% believed that the anti-dumping duty
(which has been removed) would have helped deter Chinese tyres being dumped into
the Indian market

6. Out of the retreaders that were interviewed, 33% check which Carbon Black
manufacturer's product is being used by them as they feel that the carbon black has a
huge role to play in the tread's mileage and superior performance
7. The decrease in demand that 33% of the players interviewed have faced can be
attributed to the onset of consolidation, and the need of better facilities and quality
expectations from the point of view of the truck operators since they agreed to put in a
huge investment in radial tyres over bias ply. Also, increased mileage is another factor
that makes the visits to the retreaders after larger intervals, thus creating a pseudo
decline in the demand.
8. A surprising 80% of the retreaders visited feel that due to the increased mileage after
each retread and more flexible hence not as strong a carcass used in radial tyres, the
retreadability of the tyres has declined
9. Over 83% of the respondents did their business mainly in Kerala either due to tax
implications for selling retreaded tyres, or majority of the customers come to their
facility to get their tyres retreaded
10. The general perception among the retreaders that were interviewed about the carcass
being the most suitable for retreading is the greatest for these brands (Table 5):
Table 5
Order of preference

Radial Tyres

Bias-Ply Tyres

Michelin

MRF

Bridgestone

Apollo

Apollo

Goodyear

MRF

JK Tyres

JK Tyres

Bridgestone

11. According to the retreaders that were interviewed, the threats looming in the market
are as shown below in Table 6:
Table 6
Threats Criticality Order

Attribute

Radialisation is on the rise

Chinese Tyre Manufacturers are entering India with cheap prices

Poor road network in most parts of India that damage the tyre body

Increased mileage of tyres because of technological advancement

Capital intensive technology for retreading of radial tyres

Falling prices of tyres because of competition from Chinese tyres

Poor supply of Natural Rubber in India, India being a net importer

International players entering the market

12. All the retreaders that were interviewed were of the opinion that Bias ply tyres are
easier to be retreaded due to various reasons listed below:
a. Bias-Ply tyres need much less trained labour to be worked on than radial tyres
b. Bias Ply tyres weigh lesser than radial tyres, loading and unloading is a lot easier
c. Retreading of radial tyres takes up to 4 times the time taken to retread bias ply
tyres

d. The procedure to retread radial tyres is more critical due to higher failure rates in
case the steel mesh gets exposed
The findings from the interviews I had with the truck fleet operators are mentioned below:
1. The fleet owners visited in view of the infrastructure development and in hopes of
getting more business had plans to expand their fleet of trucks as shown in Table 7:
Table 7
Expansion plans

In one year (average %)

16.17

In two years (average %)

12.64

2. Out of the respondents, 40% fleet owners visit only local retreaders, while another
40% utilize the services of both local and organized players for different retreading
needs. The remaining 20% rely only on organized players for all their retreading
needs.
3. The fleet owners that didnt prefer to get all their tyres retreaded gave the below
mentioned reasons:
a. They felt that the cost of retreading radials, and also the failure rate was high
b. They prefer to use replacement tyres for trucks in their fleet that cover more than
400 kilometres in a single trip
4. It was remarkable to notice that the fleet owners who had the above mentioned
inhibitions, they went to local retreaders for getting their tyres retreaded.
5. Upon interviewing the fleet owners, the reasons behind going for retreaded tyres
rather than buying new tyres surfaced in the below mentioned order (Table 8)
Table 8
Why retread

Attribute

Low cost of retreaded tyres compared to brand new tyres - 30 to 40% of the cost

Environmentally safe - uses a lot less crude oil than is used to make a new tyre

Required to manage tyre waste

Helps in increasing the life of a tyre

6. Once it had been decided to retread their tyres and not buy new ones, the fleet owners
considered the below mentioned factors to retread their tyres (Table 9)
Table 9
Reasons Order

Attribute

Inspection showed tread thickness close to the minimum allowable limit

Unplanned, due to tread wear and tear

Exhaustion of the mileage as specified by the tyre manufacturer / retreader

Fixed time after purchase

7. The information collected from the fleet owners was plotted in the below mentioned
graph that shows the average mileage that each brand of tyre used by them provides,
the estimated average number of retreads that the manufacturer suggests and the
actual average number of retreads done on the tyres (Fig 6)

Fig 6
90000

3.5

80000

70000
2.5
60000
50000

40000

1.5

30000
1
20000
0.5

10000

Radial

Birla Tyres

MRF

JK Tyres

Goodyear

CEAT

Apollo

MRF

JK Tyres

CEAT

Apollo

Average of Mileage (in km)

Tyre manufacturer's Estimate
Actual number of retreads done

Bias Ply

8. When the fleet owners which were interviewed were asked about the tread rubber
manufacturers they knew of, 40% cared to check the retread rubber that was used in the
tyres, while the others trusted the retreader to do quality retreading. Midas was the most
trusted and well-known brand among them that dominated mostly because of great
quality and a mediocrely reasonable price. This was followed by Tolins and TVS
Treads, with TVS treads being the brand of the future in their minds.
9. Their current tyre composition and future expectations were understood and it showed
that the penetration of radial tyres would increase from 22% to 30% in the truck
segment for these fleet owners in the next two years (Fig 7)
Fig 7

Tyre composition expectation

30
Radial
22

70
Bias
78

10

20

30

40
2017-18

50
Current year

60

70

80

90

10. When the fleet owners were enquired further as to the reasons why they do not currently
use radial tyres, the responses were recorded and the below mentioned graph typically
captures the reasons specified by them along with the scores assigned to each reason.
(Fig 8)
Fig 8

Reasons for not using radial tyres

4
6
6

Scores

17
24
27
0

10

15

20

25

30

Vehicles are old, which have had ordinary tyres. Only models bought after 2011 have Radial tyres
Non-availability of radial tyres as per the requirement
Good experience with ordinary Bias ply Nylon tyres, not willing to make the transition
Cheap imports from China are more economical
The condition of the roads is bad, tyres get damaged anyway
Radial tyres are costlier than indian made bias ply

11. 40% of the respondents use retreaded tyres on the steer wheel positions of trucks that
goes through more tension than rear mounted tyres.
12. None of the respondents had an idea about the kind of contribution they make to reduce
the impact on environment by using a retreaded tyre.
The findings from the interviews of the bus fleet operators are mentioned below:
1. The fleet owners visited in view of the infrastructure development and in hopes of
getting more business had plans to expand their fleet of trucks as shown in Table 10:
Table 10
Expansion Plans

In one year (average %)

25

In two years (average %)

11.11

2. Out of the respondents, 20% bus fleet owners visit only local retreaders, while another
20% utilize the services of both local and organized players for different needs. The
remaining 60% rely only on organized players for all their retreading needs.
3. Upon interviewing the bus fleet owners, the below mentioned reasons behind going for
retreaded tyres rather than buying new tyres surfaced in the below mentioned order
(Table 11)
Table 11
Why retread

Attribute

Low cost of retreaded tyres compared to brand new tyres - 30 to 40% of the cost

Environmentally safe - uses a lot less crude oil than is used to make a new tyre

Required to manage tyre waste

4. Once it had been decided to retread their tyres and not buy new ones, the bus fleet
owners considered the below mentioned factors to retread their tyres (Table 12)
Table 12
Reasons Order

Attribute

Inspection showed tread thickness close to the minimum allowable limit

Unplanned, due to tread wear and tear

Exhaustion of the mileage as specified by the tyre manufacturer / retreader

Fixed time after purchase

5. The information collected from the bus fleet owners was plotted in the below
mentioned graph that shows the average mileage that each brand of tyre used by them
provides, the estimated average number of retreads that the manufacturer suggests and
the actual average number of retreads done on the tyres (Fig 9)
Fig 9
80000

4.5

70000

4
3.5

60000

50000

2.5
40000
2
30000

1.5

20000

10000

0.5

0
JK Tyres

MRF

Bias Ply

Apollo

Bismi

CEAT
Radial

JK Tyres Michelin

Average of Mileage (in km)

Tyre manufacturer's Estimate
Actual number of retreads done

6. When the bus fleet owners which were interviewed were asked about the tread rubber
manufacturers they knew of, 80% cared to check the retread rubber that was used in the
tyres, while the others trusted the retreader to do quality retreading. Midas was the most
trusted and well-known brand among them that dominated mostly because of great
quality and a mediocrely reasonable price. This was followed by Eastern Treads, TVS
Treads and Janatha Rubbers, with TVS treads being the brand of the future in their
minds.
7. Their current tyre composition and future expectations were understood and it showed
that the penetration of radial tyres would increase from 80% to 84% in the bus segment
for these fleet owners in the next two years (Fig 10)

Fig 10

Tyre composition expectation

84

Radial
80

16

Bias

20

10

20

30

40
2017-18

50

60

70

80

90

Current year

8. When the fleet owners were enquired further as to the reasons why they do not currently
use 100% radial tyres, the responses were recorded and the below mentioned graph
typically captures the reasons specified by them along with the scores assigned to each
reason. (Fig 11)
Fig 11

Reasons for not using radial tyres

2
3

Scores

7
7

Not good infrastructure for alignment of retreaded radial tyres in South India
Cheap imports from China are more economical
The condition of the roads is bad, tyres get damaged anyway
Radial tyres are costlier than indian made bias ply

9. 40% of the respondents use retreaded tyres on the steer wheel positions of buses that
goes through more tension than rear mounted tyres.
10. Only 20% of the respondents had an idea about the kind of contribution they make to
reduce the impact on environment by using a retreaded tyre.

The information gathered from secondary sources is as under:

1. In the US, there is a law that all the federal government vehicles must get their tyres
retreaded. In India, however; no incentive is provided for retreading. The tax rates are
also not in favour of organised players with a tax rate as high as 22.5% (link 1)
2. Bias-ply tyres stiff sidewalls are known to perform well under heavy loads. Also, their
inherent lack of flex makes the sidewall to not wear out in a turn as easily as a radial
tyre. (link 51)
3. Using retreaded tyres is environmentally conscious. It takes 22 gallons of crude to
produce one new truck tyre. However, only seven gallons of crude oil is used to retread
a tyre. When a lot of fleet owners using hundreds or thousands of tyres each year opt for
retreading, a significant environmental impact is created. (link 52)
4. Truck radial tyres is one of the fastest growing segment with growth of around 25% in
the last two years.(link 53)
5. The ruling government has approved a plan for construction of 1,000 km of highways
and expressways at an estimated cost of Rs 16.68 crore. The proposed expressways
include Delhi-Chandigarh, Bengaluru-Chennai, Delhi-Jaipur, and Vadodara-Mumbai.
(link 54)
6. The production of tyres in the truck & bus segment increased in the past year by about
4% (Fig 12). The Truck and Bus vehicle production grew by a whopping 21% in the
first quarter of 2015 (Fig 13). (link 54)
Fig 12

Fig 13

7. In India, each year about a million retreaded tyres are produced and around 60% of
truck tyres in service are retreads. (link 20)

8. The Truck, Bus, tractors and OTR segment together constitutes around 70% of the
tyre production (Fig 14) (link 14)
Fig 14

9. The Government of India undertakes the retreading of aircraft tyres of its Air Force
which can be seen by an expression of interest raised by the Government and also by
an Indian Standard IS 15428:2004 for Retreading of Radial/Cross-Ply tyres for
Aircrafts Specification. According to another study, all commercial airlines as well
as military jet aircrafts use retreaded tyres. In the US, about 80% of all aircraft tyres
are retreads. (link 15)
10. The study conducted by CRR in 2008 shows that, the manufacturing of a 17.5 new
tyre produces 86.9 kg CO2 emissions compared to 60.5 kg CO2 for a similar retread
tyre, and total savings of an estimated 26.4 kg. This equates to a reduction of
emissions by 30%. (sharma2014)
11. As the requirement of quality retreading for huge investment in radial tyres grows, the
big tyre MNCs would showcase their technological expertise by rolling out tyres that
possess high retreadability. Since the small retreaders would not be able to compete
with the scale of operations of the tyre majors, there would be a strong consolidation
in the market. (beroe)
12. The retreading industry in India is set to grow with a CAGR of 8-10% due to the
following reasons: (beroe)
a. High penetration of radials in the Truck and Bus segment would provide better
retreadability in tyres
b. The infrastructure development in terms of National Highway projects will
reduce failure rates of tyre bodies
c. Government restrictions on truck overloading are set to become stringent
making the tyres casings to be intact for retreading

13. A study on the requirement of Natural Rubber for the production of retreaded tyres for
commercial vehicles shows the below mentioned scenario (Fig 15) (beroe)
Fig 15

14. Tyre retreading in India would grow in India and will receive a boost from the growth
in radialisation. Retreading is even expected to overtake replacement of tyres after
2018 that is when the effects of radialisation, better road networks, and better
government regulations come into play. (beroe)
15. The dumping of Chinese tyres has affected the European market much more than it
was anticipated. One example is the RuLa facility in Germany which is now
retreading 60% of the tyres it used to retread till two years ago. It is down to 60,000
tyres annually. (retreading business magazine)
16. Radialisation has started penetrating thecommercial vehicle segment in India. Due to
this, the focus on quality retreading has improved. In view of this, Apollo Tyres has
revamped its operations in this industry after 7 years of dormancy. Apollos business
is currently growing at an average rate of 18% annually. (retreading business
magazine)
17. An unusual approach was followed by Spanish tyre recycling agency TNU, which
promoted retreading of a tyre as a means of saving water. This highlights the fact that
retreading four tyres saves the as much water as the per capita consumption of water
in Spain. TNU further explained that retreading not only saves water but also oil,
rubber, steel, zinc and other chemicals, not to forget the energy put into making the
carcass. (retreading business magazine)
18. According to Eastern Treads, the market size of this industry stood at Rs. 3200 crores
with domestic growth set to rise with a double digit CV sales growth in the next few
years. Eastern also pointed out that Rail freight charges have gone up by over 50%
from FY12 to FY16, while the road freight charges have remained unchanged or
fluctuated with the oil prices.
19. The commercial vehicles segment is expected to grow at a CAGR of 30.9% during
FY2015-FY2020 (link 55)

20. More than one-third of the retreading market is unorganized. These players can quote
20% lower prices because of that. Still, quality and sense of investment are making
the fleet owners to choose organized players over unorganized players. This scenario
would further move towards consolidation as radialisation penetrates into the Indian
market.
21. The customs duty levied on the import of Natural Rubber is higher than the duty
levied on the import of tyres. This move only hampers the Indian tyre industry and
makes the Chinese dumping smoother.

Interpretations and conclusions / summary

1. The current production pattern of pre-cured treads is in line with the penetration of
radial tyres in the Truck & Bus segment that is poised at 25% and expected to reach
50% by the year 2020.
2. While the reasons of going for retreaded tyres is the cost savings it brings and it being
environmentally safer than buying a new tyre, there are inhibitions looming about
quality and efficient retreading of radial tyres.
3. Even the adoption of radial tyres isnt as much as in the west which can be attributed to
high cost of radial tyres and the poor quality of roads in India which are not suitable for
radial tyres.
4. The average life of a radial tyre as depicted by the study is about 1.8-2.1 times higher
than a bias-ply tyre, thus the trips between subsequent retreads would increase
substantially.
5. The retreadability has seen a decline because of the flex nature of radial tyres that puts
a lot of stress on the carcass. The carcass of a bias-ply tyre is stiff, making it a lot
stronger than a radial tyre.
6. On an average, a bias-ply tyre is thus retreaded more number of times than a radial tyre.
This could also be attributed to higher mileage that fleet operators enjoy even with less
number of retreads for radial tyres.
7. A higher demand for quality over price by the retreaders exists in the market. This
means that even though the local retreaders who offer services at 20% lower prices, the
organized players with greater technological expertise would be preferred. 70% of the
visited fleet owners testified this fact. Furthermore, GST implementation could
standardise the taxes for each entity and lead to a harmonizing of margin, making it
impossible for local retreaders to keep up the prices they offer currently. All these
factors would lead to a major consolidation in the market.
8. This consolidation would be fuelled by the rapid entry of major tyre manufacturers
offering quality retreading and fierce competition because of their economies of scale.
9. Although sales of some players has declined, others have seen a rather stable demand.
This could be the effect of consolidation.
10. The OTR and tractors are tied to the economy which is expected to grow at 6-8% in
FY17. A higher demand in case of OTR and tractor tyres can be seen in FY17. The
agriculture sector alone is expected to grow by 8% this year.
11. The retreaders and tread rubber manufacturers think on similar lines on radialisation
being the biggest threat to this industry followed by dumping of Chinese tyres and the
poor road network infrastructure in India. The poor road infrastructure has been
addressed by the current Government by kickstarting various development projects.
However, little has been done in case of checking the dumping of Chinese tyres and
protecting the Indian tyre industry. The duty on import of Chinese tyres is still very
low. The impact of Chinese tyres dumping has had detrimental effects on the German
retreading industry, for example, the volume of retreaded tyres for RuLa facility in
Germany has gone down from 1,00,000 tyres to 60,000 tyres annually.
12. As per the study, Silica would not replace Carbon Black as a filler / re-enforcer in the
retreading industry
13. Keeping customers satisfied and mitigating issues like non-availability of a particular
grade of Carbon Black or improper prices (both with respect to the market and among

regions) would become imperative as the number of players would come down and the
tyre majors enter the market with full swing. Midas, Tolins, TVS Treads and Eastern
Treads emerged as the most preferred tread rubber manufacturers among the retreaders,
thus making these customers important as clouds of consolidation loom over the
industry.
14. High tax implications and low duty on import of Chinese tyres are hampering the tyre
and retreaded tyre industry.
15. While a major focus still lies in the truck & bus segment for retreading of tyres, there
is huge scope of retreading in pick-up trucks and aircraft tyres. 80% of the aircraft tyres
in the US are retreaded. In India, the Indian Air Force issues tenders for retreading of
its aircraft tyres. The retreading is not limited to military aircrafts but also commercial
airplanes. A typical aircraft tyre can be retreaded up to 8-10 times.

Recommendations
1. In view of the consolidation that is expected in the market based on conclusion from
the study, the small retreaders and small to medium tread rubber manufacturers would
start shutting shop. This would mean that a greater focus on keeping organised players
happy and committed as customers by an aggressive marketing strategy and operational
efficiency would work in the companys favour.
2. A lot of MNCs are entering the retreading business with Michelin tieing up with TVS,
and Apollo Tyres expanding in this industry again after staying dormant for over 7
years. Thus, by leveraging our ties with leading tyre manufacturers like JK Tyres,
Michelin etc, we can build a customer in them for the non-tyre industry as well.

Limitations of the study

1. The strength of a questionnaire lies in the nature and language of the questions it
contains. There was a language mismatch between the interviewer and the respondents,
due to which the questions were asked differently to each respondent. This might have
led to some errors or loss of information in translation.
2. Most of the fleet operators / customers that get their truck/bus tyres retreaded from
local/organised players are not based in Kerala. Thus, triangulating and interviewing
fleet operators was a major hurdle. Only small fleet operators are present here.
3. Large players like Midas and Eastern Treads in the genre of Tread Rubber
Manufacturers were impregnable due to non-availability for appointment / meeting.
4. Only secondary data was used for gauging the demand and future potential of the OTR
(Mining) segment and aircraft tyres.

Scope for future improvements

1. A larger segment of manufacturers / retreaders / fleet owners may be interviewed to
expand the database for more efficient analysis of the data. The current sample may not
fully represent the population.
2. The study may be expanded to Tamil Nadu and Maharashtra for visiting the fleet
owners since their trucks / buses that ply in Kerala get their tyres retreaded by either
the local or organised retreaders here.
3. Understanding the industry from both the sides of small scale and large scale
manufacturers can be done. This would give better data points for a more efficient
analysis.
4. During one of the field visits, it surfaced that some of the tread rubber manufacturers
are manufacturing tread rubber for Autos, Two-wheelers, small pick-up trucks
(example Tata Ace) etc. A bigger market than it is currently expected by considering
the above mentioned segments coupled with Tractors in the Agriculture sector, Aircraft
tyres, and JCBs in the OTR segment can be researched and explored with a greater
focus.

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Questionnaire
1.

Questionnaire for the Tread Rubber Manufacturers

2.

Questionnaire for the Tyre Retreaders

3.

Questionnaire for truck / bus fleet owners

4.

Questionnaire for Kerala State Road Transport Corporation\

Experience & key learnings during the project

The short stint of 9 weeks of training that I underwent at the Kochi plant of Phillips Carbon Black Ltd was a true
learning experience. The experience was not just of a secondary research study, but going to the customers or
entities further down the supply chain, travelling distances to cold call an office, ask for people around who
could help in the study, this gave me an experience of a sales personnel. The hour long sessions and interviews
that were either planned or cold-called gave me deep insights into the industry and how it functions.
All these visits and interactions have given me a holistic view of the industry, while giving me a taste of what a
sales job would be like.
More than anything, this project has taught me that learning is superior than understanding ones language.
Initially, I had problems interacting with the locals in Kerala due to the language barrier, which got washed off
eventually not because I learnt Malayalam, but because I started finding ways to bridge this gap.