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Past Issues

May 2005

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The tyre industry has always been characterised by change. Every year, new casing and tread designs are developed and marketed by truck tyre manufacturers, promising improved performance and durability. There's certainly no shortage of choice for transporters looking to replace tyres. They can buy a new tyre, be it imported (grey or otherwise) or locally manufactured from a host of suppliers - or they can retread their existing casings. Then there is the optimisation of those 'rubber assets'. At the heart of lowering cost-per-kilometre (CPK) is good tyre management and there is a growing trend to outsource this function to tyre management specialists who have new technology like tyre-tracking software and new retreading technologies and the expertise to control rubber assets. These on-going changes in the rubber 'landscape' are now underscored by government legislation in the form of the Waste Tyre Regulation Act (WTRA) and its accompanying 'Green Levy', a burden that will initially be carried by the transporter. Paul Collings does a spot of 'skyving' around the industry to determined trends.

Yellow peril
The competition between local truck tyre retreaders is huge. The likes of Bandag, Leader Tread and Maxiprest (all highly franchised operations) have to compete not only with each other on price and service delivery but also with cheap new oriental imports. Duties on casings must be revisited as the ramifications extend beyond just how much to charge for a tyre. As Lizel Nicolau, sales director at Leader Tread says: "It's about keeping people employed. If we do not protect our retreading market from 'grey imports', retreading factories will close down and people will lose their jobs." 

According to Etienne Human, chairman of the South African Tyre Recycling Process Company - a non-profit, private sector initiative driving the WTRA and levy - the big competition for retreaders comes more from the illegal imports of second hand tyres.

"The Department of Trade & Industries and customs officials need to sort out the problem. These tyres are unchecked for safety, generally slip through without an attached customs duty and are a major cause of accidents on our roads." Human urges truckers to avoid buying rubber from obviously dubious sources. "When the tyre is sold from the roadside or on a farm somewhere, chances are it is illegal."
 

Who's gonna pay at the end of the day?
When the WTRA is finally promulgated, truck owners are going to have to pay in the region of R140 for a new tyre and an unspecified (at time of writing) amount on retreads. This lack of clarity on a retread 'Green Levy' is due to the question of whether a casing is locally produced or imported. Obviously, a retread from a local casing has already paid its levy but a retread from an imported casing will ultimately add to the scrap tyre pile and should be levied on the initial purchase. 

It all gets a bit murky on the invoicing question. New tyres will have the levy listed separately on the invoice while retreaders will not be obliged to do so. Human explains: "Retread dealers are being asked to build the levy into their price." This is where the trouble begins.

Leader Tread's MD, Brett Sproson, suspects that retread dealers are the ones most likely to foot the bill for the 'Green Levy'. "Because the retread market is so price sensitive, dealers will be put under pressure by the end user to absorb the levy - putting additional strain on the industry," he says.

Human states that the WTRA will probably be promulgated in July this year. One assumes that transporters will have to pay the levy from then on. It is going to be interesting to see the adoption process roll out among dealers and customers of truck tyres. As Laurent Colrat, marketing director of Bandag SA says: "It's easy to pass a law but difficult to change peoples' minds." Judging by what Human has told FleetWatch, getting the law passed has been anything but easy. We suspect market adoption will be just as testy. 
 

BANDAG’S Laurent Colrat about to get ‘cured’ in a tyre kiln

A whole new industry
Once the WTRA is passed into law, Human says a tendering process will begin to secure contracts with transporters to carry tyres to recycling plants. "This tendering process will take at least 12 months," he says. "We're not only talking about the major cities needing tyres removed. Small towns like Upington and Lusikisiki are also going to need tyre transporters."

While government has been reluctant to commit financial and human resources to the recycling initiative, it has insisted the tendering process for transport of scrap tyres has a BEE component. As of now, that component is not fixed. Once again, here's a whole lot of murkiness and one can sympathise with Human whose initiative makes sense, both environmentally and from a job creation point of view.

"It's been a long process and we're almost there but we need the regulation to empower the process," he says with not a little exasperation.

Debate cooking on super-singles
There are many other issues going on in the tyre industry, one of which is the introduction of super-singles into operations. A walk around a tyre plant or two will enlighten you to the fact that there's a debate cooking about the true efficiency (CPK) of the super-single. Bandag is a firm believer in the tyre having just launched its new super-single B102.

According to Laurent Colrat, this product has been specifically developed for radial tyres in trailer axle applications. "It boasts a modern design for superior wear characteristics and mileage in an on/off road driving environment along with optimum skid depth and weight ratio. The B102 has better scrub resistance than traditional non-wing rib designs preventing tread lifts normally associated with this type of application. Tested locally for local conditions at a diamond mine in the harsh Northern Cape environment, the B102 ran out 57% better than the benchmark WSM tread." 

So Bandag are believers in super-singles. Others like Sproson and Human have their doubts. "From a tyre injury point of view, they're likely to up your CPK," says Sproson, "and generally they're only good for one retread."

Scuffing, says Human, is a constant threat to tyres. "A super-single takes all the damage while a dual set on an axle halves the risk." Super-singles are relatively new to the trucking game in South Africa and perhaps they need time to settle in but right now, the initial 'warm and fuzzy' about their weight saving potential is fading a tad. It's a rough trucking world out there, let's face it.

LEADER  TREAD technicians trim pressed tread

LEADER TREAD’S Brett Sproson explains the unique vacuum bag that his company produces to ensure a new tread adheres perfectly to a used casing

Tyre management
The tyre management game is big business now and tyre control and management is outsourced by transport companies to stop premature tyre death and shrinkage of their rubber inventories. It's pretty hi-tech nowadays, with web-based tyre management systems (in Leader Tread's case), now interfacing with PDAs and PalmPilots. Says Nicolau: "Leader Tread is offering a web based system which is accessible nationally and even internationally. Our system can look after any transporter's needs from your smallest to largest fleet". 

Although it is a web-based system, one can work offline and then go on-line to submit updated information. The use of Palmpilots also makes 'in-yard' data capturing (such as fleet surveys and scraps) less time-consuming and more accurate." 

Bandag is offering an entry-level system to the smaller fleet manager. Says Colrat: "ProWheel is a tyre tracking software aimed at small to medium sized fleets (50 vehicles or less) that do not require complex reporting but rather constant and up to date tyre monitoring. The system has a practical and easy to use interface which will allow its users to comfortably navigate through the system."

Users of the system, says Colrat, will be able to "look after the basics" which includes individual branding of tyres, producing tyre change slips to monitor tyre movement and conduct accurate stock control. "It's about preventing tyre injury, doing this via proper driver training and good vehicle maintenance and via asset management; knowing the status of every tyre in the fleet, whether it's on the truck or in the store."

The wheel and the deal
Like the brake industry, truck tyres are certainly moving through 'interesting times'. Transporters have over the years had to pay a whole lot more attention to the rubber they slapped on their 'lorries'. Bigger engines, higher speeds, heavier loads, dodgy roads and cowboy drivers have all put tyre CPK under pressure.

The upcoming 'Green Levy' is going to reshape the whole CPK equation and perhaps change the way many transporters handle tyre buying and management. One thing is for sure, the levy will spawn a whole new set of issues for the industry. Watch this space...