As part of our travels down under, we visited several Vipal dealers and also had the opportunity to talk with Tiago Campanharo, who has been responsible for the Sales & Technical Support for Vipal in Australia, New Zealand and the surrounding Islands such as Fiji and Papua New Guinea since moving to Brisbane in 2012. Tiago took us step by step through Vipal’s activities in Australia and the Oceania region.
In March of this year, Vipal celebrate 11 years of activity in Australia. Originally, they were importing from Brazil, but in 2011 they opened a warehouse in Australia, allowing Vipal to offer two different supply options to their dealers. Campanharo added, “We still have customers that buy direct from the warehouse and some that do a mixture of importing from Brazil and taking advantage of the warehouse facilities in Australia”. The warehouse is located in Minto, which is about 80 kilometres from Sydney.
“One of the key benefits of the storage facility is that we are capable of providing fresh product all the time. Previously the geographic challenge between Brazil and Australia was a big problem as it took 50 days on water for the treads to be delivered. This has been solved by the warehouse, as customers previously had to order three months in advance,” expanded Campanharo.
Currently, Vipal has five dealers in Australia, are as follows: Arctic Cool (Brisbane), Metro Tyres (Sydney), Tyre Lug (Melbourne), Ecogreen Retreads (Perth), and Richardson Brothers Retreading (Warrnambool). They also have dealers for their repair line of products in the form of Tool & Tyre Accessories in Sydney and McNeil&NRM in Parramatta.
We were intrigued to know how Vipal envisaged growing their business in Australia regarding their dealer network. “Tyres4U outsource the retreading production and with a lack of independent retreaders left to come on board, this means we see growth through our current customers. Therefore, our strategy is to support them. However, we have had contact with a potential dealer in Queensland for our repair line.”
Campanharo also told us that they have one retreader in New Zealand in Hastings through Power Retreads, who make in the region of 1,500 to 1,600 retreads per month. They also recently picked up a new customer in New Caledonia too. “We are always on the look out for new customers in the Islands, for example, in Papua New Guinea, New Caledonia, among others, that we have sent samples to them”, explained Campanharo.
During our time in Australia, the retreading picture that had been painted for us was one of an industry under pressure from cheap tyres. It was no surprise that Campanharo offered us a similar scenario. “The retreading industry in Australia is passing through a difficult period. It is suffering from immense price pressure from the cheap tyres. It goes without saying, but the challenge for Vipal and our dealers is to come out swinging against this threat.”
What can Vipal do to fight back to readdress the balance that this threat is posing? At the moment, Vipal could not give anything concrete, but Campanharo stated, “Vipal is working on a number of measures and tools, which are due to be launched in 2018. We are constantly working our upmost to find tools to counteract this threat and to demonstrate that Vipal can find solutions for the customer.”
Another continuous theme in our travels had been a lack of understanding and education in the market about the benefits of retreading. This was something that Vipal and Tiago have seemed to grasp quickly. Campanharo went on, “We want to work closer with end-users to educate them about the benefits of this process. This is something that the big fleets are already well versed on, but the middle and smaller sized fleets need to improve its acknowledgment about retreading.”
What is the strategy going forward to get closer to the end-user? For Vipal it’s a multi-pronged approach through visiting clients more regularly, using software to show results and giving a better service. As part of this process of being closer to the end-user, the conversation inevitably turned to how Vipal were promoting their brand in the region. Campanharo revealed that in the past the company advertised in local transport magazines, which he conceded did have “limited impact”. However, their customers in New Zealand have advertised in a similar way in local transport magazines, which had a much better response. He continued, “We are always preparing marketing materials for the enduser and our customers. For example, we are preparing new advertising materials to help transmit our messages to the end user.” While Bandag currently hold about 55% of the marketing in Australia, Goodyear, Dunlop and Michelin shares around 18% and 11%, respectively. Marangoni and Nam Bee both at around 3%. Vipal claim to be in the middle of the pack with approximately 9%.
On these competitors, Campanharo said, “The main challenge for us to catch up with competitors ahead of us in the market, whilst shoring up against the new cheap tyres.”So, taking this competition into account, what services and support are Vipal offering to their dealers to keep them a step ahead of the pack? Well firstly, Vipal offer training to help them to explain the benefits of retreading and its process. Moreover, Vipal continue to offer tests to their customers to help provide the data that back up the quality of the treads. Campanharo expands, “we are working on carrying out tests for our Vipal compounds to hopefully supply more dealers. The tests with the Eco-treads are a new development. Although the Eco-compounds have been available for a while, it is part of constant effort to provide better