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Kandhari Outlines Vacu-Lug Acquisition Rationale

Kandhari Vacu-Lug Acquisition

Following his purchase of Vacu-Lug Traction Tyres Limited in July 2018, Harjeeve Kandhari, CEO of the Zenises Group, was the keynote speaker at the recent inaugural “Future of Retreading Conference” jointly organised by the trade fair Autopromotec and retreading industry journal Retreading Business

Reasons for Zenises Purchase Explained

In the speech Harjeeve gives his thoughts on and presented the following:

– Why did he buy Vacu-Lug Traction Tyres Limited?

– The role retreading has to play in a thorough fleet offering

– The new brand name and logo for Vacu-Lug Technologies Ltd

Given the interest surrounding the acquisition and Harjeeve’s history of entrepreneurship, the conference reported high attendance figures and hugely positive feedback. With that in mind and for those who unfortunately weren’t able to attend, Zenises would like to share with you Harjeeve’s speech on the acquisition and how he sees the future of retreading fitting into the tyre market:

“So when I acquired Vaculug, which is now Europe’s largest independent retreader, people thought I was crazy. I had many of my colleagues question me. Why an investment in a declining industry, in an old school company 50 miles left of the middle of nowhere – in a place that overwhelmingly voted for Brexit where they want to get rid of all the foreigners!!

“And when David asked me to give this keynote he pretty much was thinking the same thing but was too polite to ask me directly and he said people were wondering about the “rationale” for my investing in this old school industry especially given that Zenises is known for developing innovative concepts and disrupting the tyre industry with Cartyzen.

“The easiest way for me to answer this question is to use this platform to launch our new logo and corporate identity. We are changing the name of Vaculug Traction Tyres Limited to Vaculug Technologies Limited. This logo behind me is going to be our new more modern logo focused on the future.

“So what does this change of name imply for Vaculug and how does it answer the questions that people have been wondering about.

“Well we changed the name of Vaculug because we want to send a clear signal on where we see the business going. We see the future of the business in developing and using technologies to provide better solutions for our customers. Yes we manufacture retreads but Vaculug is so much more than that. It is a customer focused organization that really focusses on tyre fleet management and all that entails. So to answer the first question. I did not invest in a declining industry of just being a retreader- by the way our production is growing with all these Chinese tariffs so who really says it is a declining industry. We invested in an industry with a huge amount of potential – fleet management. You cannot provide an effective solution to any fleet today without a retread policy. If we want to serve our customers in the best way possible then we need retreads and will always need retreads. So if you want to provide an effective solution to fleets I guess owning Europe’s largest independent retreader makes sense.

“So when it comes to technology people always assume that you come up with some app or platform or something. Yes, that is important and we have invested significantly in upgrading VMS our fleet management app. We have major truck tyre companies – without naming names three of the top 10 are in the list – using our app to provide service for their fleets. We have companies in Malaysia wanting to private brand our app for use in their country. We have also invested in developing an effective TPMS cloud based solution for our fleets which we believe is one of the best in the industry today! But more importantly I want to remind people that Vaculug was fairly innovative as a technology player even in the retread production side. We are the only people in the industry that have 12 segment moulds.   We created this by focusing on aircraft retreading technology and figuring out how to reduce rolling resistance for our customers. The other day when I was walking around the factory I noticed that we had created special thermal insulation covers to cover our presses to keep the heat in and they worked so well that we have sold these fabrics to both Goodyear and Michelin. But I did notice that they worked so well that we now have to pay to heat the factory in the winter!

“The other part of retreading technology we have focused on is ensuring that we save the environment and this part of Vaculug is a very important reason that I acquired the business. We work with our partner Murfitts Industries to ensure that every tyre is properly recycled and converted into playing fields or reused in the tyre manufacturing process again. We even have carbon calculators for our clients to ensure that they can see the impact they have on saving the environment. We are also in the process of working with our partners now to see how we can implement the new pyrolosis technology to build a recycling plant on our site at the moment. It helps I guess to have 11.5 acres of land in Grantham to play with.

“Oh yes Grantham that lovely place 50 miles left of the middle of nowhere! So Why did we Invest there? Well frankly because Vaculug was there! But more importantly we managed to acquire the entire site and also get a great bunch of people that are working for Vaculug. There is a serious dedication and passion with the team at Vaculug – right down from the MD to the tyre fitter. People are genuinely passionate about the business and want it to succeed. You don’t get that kind of loyalty and dedication in a lot of large more modern towns. Vaculug is integrated into the fabric of Grantham. As I walk around the factory I have met people that have worked for the company for over 40 years. I have met people who are third generation in the company. In fact over a third of the Vaculug family have been with the company for over 20 years!! Given that we consider the people as part of our Vaculug family that I think is an amazing achievement and definitely one worth investing in.

“And finally, that question that everyone talks about in the UK – Brexit! Well first of all I am British! And people have that mistaken assumption that people that look like me will be kicked out of the country! I am not going anywhere. The UK has been my home for many years and through my time at Rugby School ( yes we did invent the game! ) and at the University of Oxford has provided me a great education. So investing in the UK is really a responsibility of all British citizens and I am only helping my country in its time of need. I think that Brexit is a wake up call that the UK has serious problems and most of those are really nothing to do the EU. The UK really needs to look inward and solve its own problems like healthcare and better working opportunities for all. Lincolnshire where the factory is based voted in droves for Brexit and about on average 70% of my Vaculug family voted for Brexit. I see that more as a cry for help from a desperate populace. If you as a citizen can help then it is your moral responsibility to help. And as they say if you do good for people then the Universe does good for you. In my case pre Brexit the dollar was close to 1.5 and when I acquired Vaculug it was 1.3! So you can do the Maths on what my Brexit discount was worth.”

Retreading Business recently produced a post-conference video of The Future of Retreading Conference. You can view it here.



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