On June 8th UK-based retreader Vaculug held its first ever Vaculug Dealer Day at the Malmaison Hotel in Oxford.
2022 Objectives Laid Out
Used by the company to take stock of the current market situation, to outline what Vaculug had achieved since its acquisition by Zenises and to identify objectives for the business for 2022, the Vaculug Dealer Day, sponsored in part by Vipal, was the first real opportunity to stage an event of this kind since the start of the Covid pandemic. It was also the perfect opportunity for the company to drive home to its key customers the importance of dealer partners to the future growth of the company.
Led by Commercial Director Phil West and following a strong James Bond theme, the conference part of the event focused straight in on Vaculug’s key areas of strength – the newly developed core team of people, new initiatives and marketing campaigns, specialist areas such as OTR and a forward-thinking approach. West’s aim was to highlight the huge changes that had taken place since the acquisition, but the focus was clearly on the importance that dealers could bring to the table in terms of engagement.
West began by outlining the challenging background that the company was currently operating in – a market that had been heavily affected by Covid and which was not yet back to pre-pandemic levels, container prices that are 500% higher than in 2020, natural rubber prices which are still 26% higher than in 2020, soaring energy prices, inflation expected to hit 10% by Q4 and carbon black shortages caused by the war in Ukraine.
CEO Harjeev Kandhari then talked about the demand for sustainability from the industry, the company’s strategy in this regard, and the way the Zenises Foundation, which focuses on education and alleviating world hunger, fits in with this approach.
“I genuinely feel the world needs sustainability,” argued Kandhari, before outlining Vaculug’s position as the first retreader to commit to Net Zero by 2030. Vaculug, he reminded us, had employed a dedicated sustainability consultant and was just about to publish its first sustainability report.
In terms of growth objectives for 2022, Phil West explained that there would be a heavy focus on growing the company’s VMS fleet management business especially in the logistics sector, which grew from 37-47% of Vaculug’s fleet business from 2021-22. Key plans, he said, include an integration with CAM Systems, a review of other platforms and a flexible and controlled approach to fleet growth. However, he emphasised that this growth would need to be achieved in parallel with growth in other sectors and be backed up with increased customer focus in all parts of business, including filling some skill shortages in certain key roles.
This strategy, he pointed out, would be built on the basis that Vaculug’s business is much more than just truck retreads. Apart from the VMS fleet business, which currently makes up half of Vaculug’s overall business, the company offers strong positions in the OTR and new truck tyre sectors as well as in tyre equipment
In the OTR sector, where the company works with brands such as Magna and Yokohama, Vaculug is on target to achieve 32% growth in 2022 concentrating on areas such as construction, waste, port, industrial, crane and mining. According to Phil West, the company is now aiming to achieve further growth in the OTR sector and encouraged dealers who were currently not active in OTR to work closely with Vaculug to gain a foothold in that sector. “We can help dealers get OTR business if they don’t currently do it,” he said.
In the new truck tyre sector Vaculug’s objective is to offer full and complete line of tyres, with an emphasis on being a distributor of key brands, not simply a wholesaler. Key partner brands currently include Hankook, Alphatread, Pirelli, Prometec, Giti, Genesis and Westlake. An incentivised programme is currently being built for the Westlake brand, he added.
In terms of tyre equipment, Vaculug also operates the Tyre Equipment Company, which markets a range of equipment and consumables for tyre dealers. The business, now under the management of Ian Snook, also incorporates Grumac, the company’s long standing equipment subsidiary for the retreading industry. TEC has just launched a new website to help grow its business.
In conclusion, Phil West emphasised the fact that the key to Vaculug’s future growth lies in recognising dealers are the key to market in every call they make. “We are heavily focused on building our relationships with our key dealers,” said West. “In return, all we are asking for asking for is engagement from our partners to grow free sales business, an effort to reciprocate volumes, to explore how Vaculug can add value, and some mutual objectives in principle for each year.”