China's tire retreading companies are eager for government policy support

At the recent Shandong Provincial Science and Technology Awards Conference, Qingdao Tiandun Rubber Co., Ltd. and Shandong Jinyu Tire Co., Ltd. jointly developed the “High-Valued Remanufacturing Remanufactured Complete Set of Technical Equipment and Applied Technology for Used and Special Tires” and obtained Shandong Provincial Science and Technology Progress. Awards. This marked a major breakthrough in China's remanufacturing complete sets of technical equipment with independent intellectual property rights, and its application in the recycling of general used tires . However, the news came but the industry was not happy.

“Because of the lack of substantial support from the relevant national policies, it is difficult to promote the use of advanced technology for the renovation and recycling of used tires. Now the development of this industry has faced a difficult situation.” Zhang Hongmin, chairman of Shandong Rubber Industry Association, told reporters.

According to Zhang Hongmin, in 2010, China produced about 250 million scrap tires, but the refurbishment rate was only about 3%, not only far lower than the world’s largest tire refurbishment country—about 14% renovation rate in the United States, but also less than 6%. The world average of %. This is not commensurate with China’s tire production and automobile production and sales in the world's largest country. “The reason why this huge contrast occurs is not unrelated to the lack of relevant national policies and regulations. China has not established a complete incentive mechanism to encourage the recycling, processing and reuse of used tires. The fiscal and taxation [2011] No. 115 issued at the end of 2011 Text, canceled the VAT concession for re-tipping, tire refurbishment companies worse." Zhang Hongmin said.

Zhang Hongmin also holds the same view as Director Wang of Shandong Jinyu Tire Co., Ltd. Director Wang told the reporter that in 2007, the National Development and Reform Commission issued the “Eleventh Five-Year Plan” Guidelines for Comprehensive Utilization of Resources, and listed the industrialization of waste tires and other renewable resources as one of the six key projects for comprehensive utilization of resources. The "Regulations on the Management of Used Tire Recycling and Utilization" has been included in the 2007 legislation, and plans to provide strong support in taxation, funds and other aspects. However, five years have passed and most of the above “planning” and “opinions” still remain on paper, lacking substantive and operational support for specific policies. The “Regulations on the Recycling and Management of Waste Tires” that companies are looking forward to are still in Solicitation stage.

Due to lack of policies and inadequate supervision, the entire industry is difficult to regulate. The person in charge of Shandong Qingyun Huatai Rubber Products Co., Ltd. believes that although used tire retreading companies already have production capacity, due to poor access, old tires that can be refurbished are difficult to recycle. Among them, there are not only legitimate reclaimed rubber and rubber powder manufacturing enterprises competing for the old tire source, but also the production and sales of non-“three packs” tires, standard tires, etc., which makes it difficult for used tire retreaders to establish stable old tires. The supply chain has hindered the healthy development of the industry.

“The phenomenon of small, chaotic and poor tire retreading enterprises is relatively common and it is difficult to form scale advantages.” Wang Bo, deputy director of the Technical Development Center of Shandong Triangle Group, told reporters that at present, more than 80% of the enterprises engaged in tire renewal are SMEs. The annual output of these companies' retreaded tires is generally between 10,000 and 20,000, and few of them have reached 100,000 or more. In Shandong Province, Delta (Weihai) Huada Tire Rehabilitation Co., Ltd. is the largest tire retreading company with an annual production capacity of less than 500,000, and a company in the United States has an annual turnover of 20 million tires, accounting for the world 25% of total tires.

Rongcheng Tire Renovation Plant, Yin, believes that the development of China's tire retreading industry is lagging behind. Besides the company’s own reasons, it is also related to the lack of policy support. "In terms of policy, many countries and regions have implemented waste tires free of charge. Enterprises recycling used rubber products not only do not spend money, but also receive subsidies. All products produced are also exempt from tax," said Yin.

Professor Ji Kuijiang, a senior expert in the field of applied research of used rubber products and a professor at Qingdao University of Science and Technology, said that in the United States, California can receive a subsidy of US$0.5 per one used tire, and in China’s Taiwan region, every one ton of used tires can be processed. With a subsidy of NT$3,200, Taiwan’s enterprises in Hong Kong will also receive subsidies of HK$868 per tonne for recycling of used tires. In mainland China, most enterprises need to pay VAT in full, and the tax burden is 2 to 3 times higher than that of other manufacturing industries such as machinery and chemical industry because the purchase of used rubber products is not worth the VAT offset invoices. This unfairness in policy is the biggest obstacle to the development of China's waste rubber recycling industry.