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As Published in Retreading Business Issue 19 2001/4

Green Diamond: New Opportunities in Winter/All-Season Sector

At a time when retreaders and especially those in the passenger tyre sector, are struggling to remaining competitive in a market, where price pressure from budget tyre manufacturers is causing a major problem, any genuine innovation which allows retreaders to offer a unique selling point for their products has to be viewed as a significant opportunity. One company claiming to be offering such an opportunity is New Industries Ltd, who market the Green Diamond concept from their base in Reykjavik, Iceland. The Green Diamond System involves manufacturing retreaded tyres using 1mm carbide granules (the green diamonds) in the tread compound. As the tyre wears, new granules continually appear on the surface ensuring no change in traction characteristics during the tyre's life. The concept is claimed to offer major marketing opportunities to innovative and marketing oriented retreaders, particularly those in areas where there is a significant demand for winter or all-season tyres. New Industries is a public company with several major shareholders including the biggest insurance company in Iceland, the Icelandic Public Road Administration, two investment banks and a group of private shareholders. Dacapo also own 12% of the company. The operation is run by Fridrik Vigfusson, who joined the company at the beginning of 2000 in a move from the fishing industry, where he had been a fleet manager. The granules used in the Green Diamond System are manufactured in Austria and Germany and shipped directly to the retreader from there, with the Reykjavik office acting as a sales, marketing and technical back up to users. Customers include Eastern Tire of New Glasgow, Nova Scotia, Techno Pneus in Rimouski, Quebec, High-Tec in Edgemont, South Dakota, Rupp in Switzerland, Vacu-Lug in the UK and Laholms Regummering in Sweden, which has now actually renamed itself Green Diamond. Green Diamond retreads were also manufactured at Solning in Iceland until the recent closure of Solning's retread plant. Solning are now importing Green Diamond tyres from Sweden. The use of the Green Diamond granules, says Fridrik Vigfusson, results in tyres with a number of key performance, safety and environmental advantages. The most important factor is that the tyre, whilst designed for winter driving, is good in a variety of conditions, including on snowy, icy, wet and dry surfaces. Unlike specialist winter tyres, in which wet and dry characteristics have often been compromised in order to optimise performance in snow and ice, the Green Diamond system allows greater flexibility, in that it is possible to use a harder compound and add granules, providing exceptional winter traction without losing summer performance characteristics. This allows the tyres to be used all-year round, making Green Diamond tyres a true all-season tyre. Furthermore, the tyres' characteristics make them ideal for use in areas where the daily temperature varies a lot and where there is a mixture of snow, ice, wet and dry such as in Southern Scandinavia, Iceland, Germany as well as potentially in the UK. A further benefit arises in the fact that the lateral friction achieved by Green Diamond tyres is the same as in new studded tyres. There is therefore an environmental message in areas where studded tyres are used, particularly in reducing asphalt dust pollution caused by studs and in the ensuing reduction in damage to roads. This, incidentally is significant reason why the Icelandic Public Road Administration took a share in New Industries. A number of research tests have been carried out in order to prove the performance of Green Diamond. For example, a test carried out by VTI (the Swedish Public Roads Administration) found that Green Diamond tyres give similar traction on ice to studded tyres. This test used two sets of Green Diamond tyres retreaded by the same manufacturer, one with and without granules, plus new tyres including Gislaved SoftFrost, ContiVikingContact 2, Bridgestione Blizzak, Cooper Weathermaster, Goodyear Ultragrip 5 and Michelin Alpin. Furthermore, the same test ascertained that the tyre was particularly well suited for use with ABS braking systems. In the test its was shown that at 13% slip, representing an ABS braking situation, Green Diamond tyres had a significantly higher friction than all the other tyres in the test. Meanwhile, BAST (German Public Roads Administration) found that Green Diamond tyres caused 93% less road wear than studded tyres, whilst HLJOD (specialists in sound measurement) found the tyres noise emission level was on a par with new studless tyres. According to Fridrik, the important technical work to establish the quality, safety and environmental cases for Green Diamond tyres has now been done and the emphasis is now turning to marketing. This is not necessarily easy, bearing in mind the traditional role of the retread as a the lowest-cost option and the tendency for retreaders in many areas to focus solely on cost in decision making. The marketing of Green Diamond retreads requires a willingness on the part of retreaders to completely rethink their marketing strategies and to market the tyres according to quality, safety and environmental issues rather than on cost. The system is more expensive that normal retreading both in terms of the cost of the granules and in terms of wear and tear on moulds and hence retreaders must be able to sell the tyres at a premium. Fridrik, however, insists that there are plenty of opportunities for Green Diamond to be sold in this way. In North America for example there is an opportunity to offer a "true all-season tyre" in country which is unused to the sort of performance provided by specialist winter tyres. This campaign is being spearheaded by Jeff Barlow of Green Diamond North America Inc. of Elmira, NY. The company's sales literature focuses heavily on safety issues and makes good use of consumer referrals, in particular one from a retired police chief called Barney DeMember who wrote in to say " the last few days we have had just enough snow and ice for me to give them (Green Diamond tyres) a test. They are unbelievable safe. I passed cars with snow tyres on that slid off the road". With three North American retreaders producing Green Diamond tyres and a fourth in the pipeline as well as European retreaders operating in both Scandinavian and alpine markets, Green Diamond is now looking to make significant progress in the winter tyre market in both regions.

 


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