Page 22 - CTB N15 - 2016-03

RETREADING
Customer the Focus for Vacu-Lug as Market Options Open Up
Vacu-Lug, the Lincolnshire based retreader and fleet management operator, is continuing to adapt and concentrate to the wants and the needs of the customer in the changing post-Brexit environment, through investments in their facilities and staff as well as their
new tyres showing positive signs of growth. With this in mind, Hercock was keen to highlight that truck tyres and fleets solutions are at the base of ever ything Vacu-Lug do. The key? Finding the right partners to support these operations.
The retread market at this stage is
diversified product range; which includes products for off-road and mining, as well as wheels and tyre- fillers. With a wide distribution network to support it, Vacu-Lug has spread the risk and limited the impact of the turbulent retread market. Hercock told us that the main idea behind this is to, “offer what your customers want and adapt to their needs.” This clearly, is a constant trend that runs through the blood stream of Vacu-Lug. Despite this difficult and turbulent scenario, Hercock believes that, “retreads are far from finished.” Why? The changes in the price of oil and a significant currency movement of the pound post-Brexit, which they assess as a “medium to long-term” change, will act as a decent platform for export. With this and an increasing demand for bead-to-bead retreads compared to pre-cure, Vacu-Lug want to mobilise themselves to take advantage of the market conditions from Brexit
move forward with their fleet management operation. He explained that the target for their fleet management function is the general logistics sector and that the developments in their Logistik product range has been well received, with this product helping them to leap forward in terms of rolling resistance. The reason for this focus, is due to what Hercock believes as a perception of the company not doing much in logistics. Despite the reality being that the company’s activities in logistics and waste sectors are fairly equal, he still feels that they are under-represented in this segment. Finally, we spoke about Vacu-Lug’s strategy on new tyres and how their different brands complement each other. In Hercock’s eyes, Vacu-Lug were probably originally slow to react to customer demands for a variety of new tyres, before they changed their approach to what he refers to as, “Good, Better, Best.”
Tim Hercock
products and service offerings. In an exclusive interview with Commercial Tyre Business, Managing Director, Tim Hercock spoke about the above, as well as retread opportunities, the make-up of the company’s new tyre portfolio and his views on some of the possible Brexit impacts.
Vacu-Lug have been around for over 60 years now, with a business that according to Hercock, “has changed several times over with a business
going through challenging market conditions exemplified by a European-wide sales downturn equivalent to approximately 30% of the market. Vacu-Lug have seen premium retreads go down 8-10% against a market of 20-25% with a close to 15% reduction in overall demand. Obviously, with the competitive threat from cheap imported tyres, the retread market has been heavily affected. Vacu- Lug’s weapon of choice to counter-
Tyre moulds inside Vacu-Lug’s factory in Grantham
Vacu-Lug’s Logistik tyre range
reinvention ever y 5-10 years.” Over the last few years there has been an increased focus on management for the end user through the addition of a one-stop shop approach. At this point in time, around 65% of Vacu- Lug’s total sales is accounted for by retreads, with other services such as
act this has been a concentration on improving production efficiency and with this they have been able to decrease unit costs through factor y investment programmes. Additionally, the issue has not been as damaging for Vacu-Lug, since one of their key advantages is their
through exportation, something Hercock concedes they have been shy of in the past due to the adverse market climate that we now find ourselves in. The company plans to achieve this by using distributors initially, but they also see opportunities through the internet. Regarding Vacu-Lug’s fleet management operation, Hercock told us that the mission of this function is to guarantee effective tyre management, so that the operators know that the work is done to the standard that their vehicles require. The critical component to this is to keep downtime to a minimum. What Hercock sees as a key challenge, is to sift through the endless statistics and information that is available nowadays and to turn that into something meaningful, easy to understand and to view. As always, Hercock referred back to the importance of delivering what the customer wants.
We asked Hercock what markets Vacu-Lug are looking to target to
This covered new, off-road and retread tyres to offer a wide range of tyres to satisfy customer demands. The new tyre offerings are made up of Pirelli, Yokohama and Westlake. Pirelli represent the company’s premium offering, with their relationship emanating from doing Pirelli’s retreading. The company also still has Yokohama despite the Japanese manufacturer’s production constraints, due to their success in North America. The third tyre is that of Westlake, their value option, delivering reliable performance and a retreadable option. Vacu-Lug’s partnership with Westlake is now three years old and is one that continues to develop, as illustrated by the recent addition of their own Westlake van products and their new range of upgraded truck tyres. Looking forward, Hercock revealed that they don’t really want to add to their new tyre portfolio, but as we’ve seen they are a customer- focused company and they will be led by what their customers and the market is telling them.
22 Commercial Tyre Business
CommercialTyre
Management
and Fleet Business