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On February 5, ARESP, with support from ABR, ASSOBAN and ARVIP, promoted the 1st Meeting of Retreaders of the State of São Paulo in 2020.

ARESP’s president, Mr. Alexandre Levi, opened the event renewing the entity’s commitment to work for the defense of the sector’s collective interests, wishing to welcome the members and potential future members, present at the occasion.

In the sequence, Mr. Levi shared some economic indicators, promoting a debate on market behavior in 2019 and a reflection on the prospects for 2020.

Supported by information provided by the National Federation of Motor Vehicle Distribution, Mr. Levi presented the positive balance of vehicle sales in Brazil in 2019, at the rate of 10.48% in relation to the previous year, highlighting the increase, in the same comparative period, in sales of the following categories: Light commercial: 7.76%, Trucks: 33.12% and Bus: 38.94%, as well as FENABRAVE’s perspective on a new cycle of growth in vehicle sales in 2020, projecting an increase of 9 , 67% on the results obtained in 2019, expected to exceed 4.3 million units.

Expressive numbers given the drop of 0.8% in the real revenue of the Brazilian industry, in the same period, estimated by CNI. The market for new tires fell by 0.1% in 2019, compared to the previous year. Sales of truck tires increased by 1.8% while sales of light commercial tires down by 3.9%, according to ANIP data.

Informing that the performance of the tire reform sector in 2019 will be made available soon, Mr. Levi gave the floor to the General Manager of Tech International do Brasil Soluções em Reparos Ltda, Mr. Richard J. Suarez, to whom he thanked the participation and the invitation accepted to deliver the lecture: How to calculate the cost of repairs used in the retread.

In an exhibition supported by real examples, estimated numbers and models of calculations, the speaker made valuable projections on the accumulated value of repair services in the result of a retreader.

Richard stressed the importance of properly calculating costs in order to find the real result of a retreader operation. “The contribution margin of each reform will impact on the variation of this equation, even at the breakeven point, which must be understood as mobile, especially when impacted by sales that generate a negative contribution margin”.

The contribution margin represents how much the profit from the sale of each product will contribute for the company to cover all its costs and expenses, and still generate profit. If it is negative, this margin will be “destroying value” and, in this case, the more the company sells, the more losses it can accumulate.

In the last panel of the event, Levi further deepened this reflection by sharing estimated data on the average percentage change accumulated in the last 12 months of the main cost components of the renovation activity, recalling the importance of updating the values ​​agreed in the contracts in view of the effects caused by the ordinary inflationary process that occurred in the market through the application of general or sectoral economic indices, or another suitable and sufficient criterion.

“All suppliers are practicing periodic price adjustments, so it is impossible to reach even the point of equilibrium (zero profit) without following this same movement”.

The event was attended by 30 retreader owners in the segment who shared information additional to the recent increases in industrial costs, as well as shared positive experiences in the correct collection of repair services.

Members of the ABR board of directors participated in the event bringing, in the greetings given by the entity’s president, Mrs. Margareth Buzetti, the repeated invitation to distance ourselves from the mistaken idea of ​​“by-product”, reinforcing the need for daily efforts to enhance the retread activity, supported by its unmistakable greatness in view of the economic, social and environmental contribution generated to the country. Finally, Mrs.Buzzeti stressed the importance of associative, considering it to be the only possible way of uniting, strengthening and defending the segment. “The brands ABR and ARESP are you, associates.”

Access:

Presentation: 1st Meeting of Tire Reformers in the State of São Paulo – 2020

Lecture: How to calculate the cost of patch used in the renovation.

ARESP – São Paulo Association of tire retreading companies

ABR – Brazilian Association of tire retreading industry

ASSOBAN – Brazilian Association of Bandag dealers

ARVIP – National Association of Vipal authorized retreader