Hot on the feet of crude-pushed rubber prices, tyre retreading costs are set to roll up the escalator. While guilds in unorganised sector of tyre retreading are hinting at higher pricing from next week, organised sector players are yet to decide.
The cost of tread rubber and other raw materials have gone up by 40% in last 90 days. ?This makes a corresponding hike in tyre retreading unavoidable,? T Appukuttan Nair, president, Tyre Retreaders? Association told FE.
One may recall that the tyre retreading business had jacked up its prices by 20% from March 1. The sector had been resisting the input cost-push, fearing competition from radial tyre business. But with rubber prices crossing their fear threshold, apparently the retreaders are readying to jack up the costs for the second time within last five months.
When a tyre wears out, only 25% of its value is eroded. But the rubber casing, that gives the tyre its shape, has become costlier by 30-40%.
Over two lakh tyre retreading units in the country are caught between the pressures of rising input costs and competition from major tyre firms with own retreading divisions, John Pettah, a tyre retreading entrepreneur said.
Those in the SSI sector usually go for the conventional mould cure retreading method. Big players, with international tie-ups prefer procured retreading and can tough weather the cost-push longer with scale economies. Elgi, Indag, MRF, Sundaram Industries, Annamalai Tyre retreading Corporation and Staines Tyres are the major players in organised tyre retreading business.