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0207 289 1043 ptaylor@veravis.co.uk

Helping hand

News that Double Star, China’s mid-ranking tyre manufacturer on the world scale is to partner with Europe’s relative new boy Zenises in a new European joint-venture.

Like a lot that comes from Zenises it is innovative and logical. Zenises has the marketing know-how and Double Star a lot of tyres to sell. Both should profit. More importantly this may be an indication of the way forward for many other Chinese tyre producers with more manufacturing capacity than market know-how when it comes to Europe, as it will also bring with it some reality check as the Chinese wake up to the sheer difficulties in selling worthy, but unrecognised brands to the European consumer. Their sense of victimhood is palpable as European importers play against one another in an ever downward price spiral. It cannot continue forever of course but it is their sheer lack of sales and export market expertise that has kept this scenario alive for so long.

This Zenises led model is likely to be adopted by others with a talent to succeed and the know-how to build brands and will providing the kind of game changing environment which Europe’s legacy brands have yet to experience.

Looking beyond all of this the bigger question perhaps is what happens when disposal (sorry, recycling) routes tighten as they inevitably will. The answer of course is further market distortion.

We, in Europe have long been subject to Producer Responsibility in its various forms which have been interpreted and imposed in various forms, not all of which pass the transparency test. Some are short of being market friendly which is one reason why tyre recycling as an industry in its own right has shown such small progress on our continent.

 

The obvious danger now is that as the market tightens more surreptitious ways will be found to facilitate disposal possibly through a misuse of the mandatory recycling charges in countries favouring these. Such behaviour is not difficult and may already be happening; at least one European country so thought to exporting tyre-derived granulate well below market rates, there may well be more. I wager this subject will soon assume an inter-governmental dimension.

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