The entire international retread market has been under threat in recent years due to the fierce competition instigated by China which sells new tyres at significantly lower prices. Indeed until recently this situation was unexpected: in Europe alone it has now eroded one quarter of retreaded tyre sales.
Currently the situation seems quite serious for all western manufacturers and there is little chance of the trend reversing in the short term, considering the current cost of raw materials and the absence of protectionist measures.
Other leading companies in the sector have been forced to implement drastic solutions, making significant cuts to their workforce and closing production sites: the most significant case involves Michelin, which has recently announced that a retreading plant at its headquarters in Clermont-Ferrand will be closed, and a further 164 cuts in the Engineering department. Note also that in 2015 Michelin closed its plant in Alessandria, Italy.
The Marangoni Group, just like all the others, has been hit by this storm. Coming off worst is the Rovereto plant, already affected by the general economic crisis in Europe, and above all Italy, since 2008-2009.
How did Marangoni immediately respond to this critical situation? By turning to the values and style that the company has always stood out for, and that we could summarise as: heart in our local territory, legs capable of running, eyes focused on the future.
In 2009, the general economic crisis, together with the credit crunch, led the company – for the first time in its history – to adopt financial consolidation actions in order to avoid repercussions in terms of employment. Staff cuts were avoided thanks to the lease-back of the Rovereto site, made possible with the support of the Provincia Autonoma di Trento and backed by employment commitments (for four years); these commitments were completely fulfilled, even beyond the term of the agreement and above the defined levels.
This was not an outright grant, but rather the purchase of an asset that the Marangoni Group is buying back with monthly instalments, including interest.
In addition to this financial operation, several “structural” downsizing processes affecting the other manufacturing sites (Feltre, Frosinone and Anagni) have already been put into place within the Group.
In Rovereto, new car tyre production was stopped two years ago. Following this, the least synergic part of the Group - Pneusmarket, the retail tyre network covering northern Italy - was sold to Fintyre, a European leader in the tyre distribution business.
A few months ago we also decided to stop production of retreaded tyres for light transport and 4x4s in Rovereto, and in the near future delocalise the remaining solid tyre manufacturing operations to Sri Lanka.
Finally, we are concentrating the production of compounds in Rovereto, with the objective of supplying all the other Italian production plants from this site. We have also upgraded our truck tyre retreading plant, so as to boost competitiveness.
In the meantime – as we have seen with Michelin – the crisis due to competition from China has accentuated and has completely changed the scenarios, which are inevitably imposing a downsizing of manufacturing assets and company organisation, with the objective of finding a configuration that is both sustainable and adequate for present and future prospects, yet with consequences in terms of employment levels.
This is a situation that until now Marangoni, as we have seen, has attempted to avoid at all costs. We know our employees one by one, their families, their day-to-day lives. With them, and thanks to them, this company has grown and has become an international group. Every single person made redundant is a painful loss for us.
Unfortunately, we have been forced to confront – reluctantly – a harsh reality: we need to face the future well-equipped, with a suitable company profile, in order to compete at our best on international markets and defend our Rovereto plant.