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Dumping of cheap tires threatens retread industry

According to the Retread Manufacturers Association (RMA), dumping of cheap tires is not only devastating the environment but also the retread industry

 

Left: RMA chairman Patrick O'Connell

Last week, key representatives from the Retread Manufacturers Association (RMA) and the tire industry met with UK government ministers at the Department for Business to press for urgent measures to address the imminent threat already being felt across the UK and European retread industry.

The RMA presented data illustrating how the ‘dumping’ of cheap tires is having a devastating impact on the retread tire industry with direct implications for employment, the tire recovery program and the environment.

The RMA argues that the evidence of ‘dumping’ taking place is clear by simply comparing the cost of raw material and the retail price of the Asian imports. For a truck tire, which typically weighs 60kg, the materials cost approximately £1.16/kilo, giving an overall total cost of £70. Meanwhile, these tires are retailing in the market at around £73, leaving a margin of just £3 for manufacturing, transportation, import duty and profit.

That is an impossibly low amount for a commercial operation to sustain without significant subsidies from a backing organization or government.

The RMA is calling for urgent action to enable the UK retread industry to compete on an equal footing with the cheap and subsidized imports flooding in. Without intervention, the future of 2,500 employees across the UK’s industry is under threat.

At the same time, without a successful domestic retread industry, three times more waste truck tires will be disposed of across the UK, putting an overwhelming strain on the tire recovery program.

At the meeting, government representatives were reminded that of the €1bn (US$1.1bn) the industry generates across the European Union, 60% is generated by SME businesses, which are particularly vulnerable to the impact of dumping practises.

November 12, 2015

 

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