Interview: Jeroen Lust, Head of Truck and Bus Business Development, Bridgestone EMEA
To coincide with the introduction of Bridgestone’s “Built for Better” campaign to relaunch the Bandag brand, we managed to catch up with Jeroen Lust, Bridgestone’s head of truck and bus development. We talked to him not only about the prospects for the Bandag brand, but about the challenges currently being faced by the whole of the retreading industry.
Commercial Tyre Business
Could you please begin by describing the thinking and reasons behind the current Bandag rebranding exercise?
First of all let me explain that the Bandag rebranding is not a stand-alone exercise. It’s part of our global initiative to re-emphasise the sense and value of retreading in general. More than 60 years ago, Bandag changed the tyre industry forever when Roy Carver founded Bandag Incorporated. The Bandag brand soon became synonymous with retreading. Of course there were challenges along the way, above all convincing fleets and truck drivers that a retread tyre was a safe, reliable option.
Thanks to perseverance and innovation, retreading really took hold and became an accepted – and even expected – practice. But clearly there are no certainties in business and the world is continuously changing. Retreads still offer great value and are being used to improve performance and efficiency by the most demanding and professional fleets, but in other segments of the business, the retread industry is under significant pressure.
“Disposable” has become the mind-set in manufacturing and in consumer culture – everything from cameras to diapers to tyres. “Quality” is being replaced by “quick and easy” and the market is inundated with cheap import tyres offering temporary savings over long-term value. There is now a new generation of drivers, fleet managers, and businesses who don’t necessarily fully appreciate the value of retreading. There’s a general misconception of retread quality, there’s misunderstanding of the value package and we as a business and an industry are not getting the credit we deserve for the economic and environmental value we bring.
So after 60 years we simply had to ask ourselves the question where to go from here?
The conclusion was that every successful business is rooted in a vision, yet continually reinvents itself. And that’s exactly what we had to do: re-emphasize to our customers what we stand for. Our clear message to fleets is that retreads are better than ever before. Our Bandag retreads are proven to be comparable to new tyres and offer world-class performance for a fraction of the cost. Our Bandag retreading story is powerful and compelling. It’s right for fleets, right for our economy and right for our environment. We’re convinced that it’s now the ideal time to stand for what’s right and be the voice of the retreading industry again.
What are your views on the future of pre-cured retreading in Europe and how can you maintain your positioning given the constant competition from mid-range and budget brands of commercial vehicle tyres.
We don’t expect the European demand for retread tyres to grow significantly in the foreseeable future. On the contrary there is still a risk of the market contracting. However, given all the objective benefits that are generated by retreading your tyres – both economic and environmental benefits - I do believe that we have the ability and even the duty to explain, demonstrate and prove this to our fleet customers. Retread tyres still represent a very significant part of the market demand and quality retreading is here to stay.
To prove our point, we’re now approaching our fleet customers and Bridgestone Partners to engage in the Bandag Contract of Trust. Together with our Bandag Franchisees we’re prepared to guarantee and prove that Bandag retreads are as reliable as new tyres and Bandag retreads cut the fleets’ tyre cost per km.
We are also convinced that we have a very strong offering because of the Bandag pre-cure model. We’re the only global new tyre manufacturer offering a local, flexible and fast retreading solution with uniform standards and a magnificent performance potential. And thanks to that pre-cure process, we limit heat-stress on the casing so there are potential benefits for multiple retreadability as well.
Practically every fleet operator in Europe - and by extension in EMEA - has access to our world-class quality and reliability through his local specialist. We offer quality they can trust from a supplier they trust.
What are your views on the impact of the wide variations in rubber prices over the course of the last year and how that will impact on the retreading market?
Raw material prices in general have been quite volatile lately. Of course, this generates some instability but it’s not necessarily negative. At least we’re not experiencing things that way. On the contrary, labour content in low-cost new tyres is relatively low so a material price increase impacts their tyre prices relatively more than our premium retreads and new tyres. So, if anything, increasing material prices can improve our position. Moreover, thanks to our continued cost reduction efforts, we’ve been able to keep our tread material prices stable so far this year, giving a competitive advantage to our dealers and a compelling offer to our fleet customers.
Could you please give us an update on your strategy with regards to your mould cure retreading interests, how you see them fitting into the overall scheme of things?
Given the advantages of our local pre-cure model, clearly the Bandag franchise is our main priority. We are maintaining and even modernising our mould-cure capacity to serve the fleet customers who might have a preference for this process, but our main focus is on Bandag.
When you think about it, retread tyres must be one of the few products in the world for which customers are interested in the manufacturing process. If you look at retreading on a global scale, you’ll notice that even the manufacturers who strongly advocate mould-cure retreading in Europe often adopt the pre-cure process in other parts of the world. Anyway, we want to serve our fleet customers in the best way possible so we’re sticking with Bandag pre-cure as integral part of our Total Tyre Care solution offer.
Finally, please could you give us an analysis of the different challenges you are currently facing and your aims in different parts of the EMEA region.
We can still get bigger and stronger in Europe, but as stated earlier, this is not a growing market. As you know we are already present in EMEA and we have a very strong position in Turkey. Seeing as those markets still have a growth potential, they’re getting our full attention and support.