Page 15 - CTB N13 - 2016-01

RETREADING
RMA Reacts to Chinese Dumping Practices
According to the Retread Manufacturers’ Association, without immediate intervention to stop the deluge of cheap tyres from China entering the UK market, the future of 2,500 employees across the UK’s tyre industry is under threat. The message was issued by the RMA in response to the recent announcement that Tata Steel is to cut 1,050 jobs in the UK –
The Retread Manufacturers Association (RMA) is calling for urgent action to allow the UK retread industr y to compete on an equal footing with the cheap and subsidised imports coming in from China.
Now many readers might consider the Association’s reaction to market pressures to be somewhat over-melodramatic. However, the fact is that the tyre industry
worldwide is being badly affected by the overcapacity situation in China and the continuing financial support given by the Chinese government in an attempt to prop up failing factories, and reaction to the situation is coming from official bodies across the globe.
In France, Régis Audugé, Director General of the Syndicat des Professionnels du Pneu (SPP) has commented; “We are seeing a massive influx of tyres originating in South East Asia, which are
seducing hauliers with lower investment capabilities. Retailers are also being disadvantaged by economic pressures and are no longer able to follow the measures necessary to support retreading.” Meanwhile, the United States International Trade Commission has launched an investigation into dumping allegations related to Chinese-produced truck and bus tyres sold in the US market. The ITC released information on its
action on 29 Januar y; the decision to commence preliminar y anti- dumping and countervailing duty investigations follows the lodging of a petition by the United Steelworkers union. The ITC is required to reach a preliminar y determination by 14 March 2016 and inform the United States Department of Commerce of its views by 21 March 2016.
In India, the Automotive Tyre Manufacturer’s
Association (ATMA) – as well as various local
manufacturers – have raised the issue with the government, complaining that the Indian tyre industr y is being negatively affected by the devaluation of the Chinese Yuan, which they say is a response to the slowdown in China’s economic growth and designed to boost exports. The result they say is doubling of Chinese tyre exports to
India, including commercial, truck radial and passenger car radial tyres. ATMA is demanded the Indian government raise tariffs to 30%.
It is therefore no surprise that representatives from the RMA and the UK tyre industr y have already raised the matter with ministers from the Department for Business to press for urgent measures to address the threat already being felt across the UK and Europe. The situation becomes clear by simply comparing the cost of raw materials with the retail price of Asian imports.
For a truck tyre, which typically weighs 60 kilos, the materials cost approximately £1.16/kilo, giving an overall total cost of £70. Meanwhile, Chinese imports are being sold at around £73, leaving a margin of just £3 for manufacturing, transportation,
import duty and profit.
The RMA asserts it is impossible for a commercial operation to retail tyres at this price without significant subsidy from a backing organisation or government.
At the meeting with ministers, the RMA reiterated that of the €1 billion the industr y generates across the European Union, 60 per cent is generated by SME businesses, which are particularly vulnerable to the impact of dumping practises.
Patrick O’Connell, Chairman of the RMA, who led the tyre
industr y deputation to ministers, said: “We were extremely sorry to learn that the flooding of cheap imports into the UK steel industr y has had such a devastating effect. This is terrible news for ever yone affected and those working within the steel industr y.
“Unfortunately, this mirrors what is happening in the UK’s tyre industr y, with jobs under threat
as a result of a flood of cheap tyres from China into the UK. We are calling on the British Government and European Commission to take immediate action on the ‘dumping’ of tyres from China into the UK and European markets. Data supports the view that without intervention, the future of 2,500 employees, either directly or indirectly employed by the UK retreading industr y, is under threat.”
He added: “We are committed
to lobbying on behalf of the retread industr y to secure its long- term future in the UK.”
Patrick O’Connell
including 750 at Port Talbot, the UK’s biggest steelworks – as a result of a flood of cheap imports, particularly from China. According to the RMA, in the same way as the deluge of cheap imports has damaged British steel, the ‘dumping’ of cheap tyres from China into the UK market is devastating the retread tyre industry with direct implications for employment, the tyre recovery programme and the environment.