Supply Chain of Tire Industry

Topics: Tires, Tire, Recycling Pages: 15 (4165 words) Published: May 2, 2011

This project provides a framework for scrap tire management; based on the description of the key technologies in a tire supply chain. The main actors and technologies in a tire supply chain are described. India have no legislation for the disposal of used tires as of now, but very soon the need will arise for such legislation. Also, dumping of used tires from other developing nations is a major issue. In the wake of these issue a proper supply chain for the scrap tire management is developed, which will have economic as well as environmental concern.


The tire industry is global and mature, it is estimated that the industry generates worldwide around one billion new tires each year. The countervailing fact is that the same amount of scrap tires has to be disposed. The scrap tire problem deals with aspects related to business, technology development, the environment, and society at large. A huge scrap tire problem is created because the vulcanized rubber of scrap tires cannot easily be reformed back to its original state to be used in the production of new tires. Moreover, landfilling or stockpiling tires is an environmental burden (aesthetic pollution, fire and health hazard). Therefore alternative economically viable and environmentally friendly ways have to be found in order to dispose tires.

The Industry Overview: Global

The scrap tire industry is driven by regulation. The industry has been created virtually due to government regulations enacted to address the environmental concerns about illegally dumped or stockpiled tires. Governments are also trying to improve the viability of the industry by providing incentives to end-markets that use scrap tire derived products. The United States and Japan were the first two countries to address the environmental hazards of scrap tires and put the laws in place. As a result, they are currently the leaders in recycling rates and market size. Europe has been a laggard in this aspect, but with the deadline for implementing EU directives fast approaching, the European industry is expected to register strong growth.

Timing of regulatory introduction dictates the current state of development. The scrap tire recycling industry is at different stages of development in different countries. The development of the market is directly linked to the timing and pace of regulation and the size of the domestic automotive market.

End-markets in the US are more diversified. The US was the biggest recycler in 2003, followed by Japan. The US recycled about 3.3 million tonnes of tires in 2003 while Japan recycled 855,000 tonnes. Germany is the largest recycler in Europe. While, tire-derived fuel is the major end-market in most countries, civil engineering applications are growing faster. The markets for scrap tires are more diversified in the US than in other countries. In countries such as Japan and Germany, tire-derived fuel is the predominant application. Europe is likely to grow faster in the next few years. Industry growth in Europe is expected to outpace that of both the US and Japan over the next few years. EU countries, especially the ones with low recycling rates, are expected to contribute to the bulk of the growth. Recycling rates in the EU have taken off following the issuance of EU landfill and recycling directives. The growth in recycling rate is expected to taper off in both the US and Japan as rates approach 100% and automotive demand continues to stay flat. Countries such as India and China, whose automotive demand is currently booming, are expected to pay attention to this issue soon.

Profitability of the industry remains the most immediate concern. This is likely to continue until the tire-derived products can compete with other materials on purely technical terms and price rather than relying on incentives. However, lack of technical standards and specifications for crumb till recently has hampered penetration into engineering markets....
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • supply chain Essay
  • Construction Industry Supply Chain Essay
  • Essay on supply chain
  • Supply chain Management Essay
  • supply chain Essay
  • Supply Chains
  • Essay about Sustainable Supply Chain Management
  • supply chain history Essay

Become a StudyMode Member

Sign Up - It's Free