Part 8 in the Agricultural Tyre Feature features an interview with the Head of Sales for Northern Europe for Galaxy and Alliance, Ole Bæk. During the interview Bæk comprehensively outlined the company’s strategy during the COVID crisis, but also detailed how product development has driven Yokohama Off-Highway Tires’s growth recently. In addition, we were given insights into how agricultural tyres could develop in the future with the advent of autonomous vehicles. For the interview, Bæk was joined by colleague Julia Verbunt the PR and Communications Manager Europe for Yokohama Off-Highway Tires.
We commenced by discussing a topic that has unfortunately been a staple of all conversations in 2020 and 2021, namely COVID-19. We asked Bæk how Yokohama Off-Highway Tires and in particular the Alliance and Galaxy brands tackled the crisis. Bæk‘s response highlighted a calm and measured approach at a time, when it would have been very easy to panic and make a knee-jerk reaction.
“So, when COVID went from something that was happening in China to something that was involving all of us, we began by looking at the marketplace and thinking: ‘How are we going to deal with this?’
"We began by concluding that with agriculture, people are going to have to eat whether there is coronavirus or not.”
Moreover, Bæk explained that in a pre-Covid environment, the European Management Team would catch up approximately once per week to share insights on a market-by-market basis. However, this communication was intensified significantly accordingly to Bæk to guarantee that the company was proactive in seeking out any major changes in market behaviour during the pandemic.
He said, “We normally touch base every week with the European Management Team, but during the pandemic we started talking every second day. We intensified communication dramatically to share what was going on in the market, how the customers were reacting, and how the end users were reacting.”
In terms of Yokohama’s OHT’s customer base, Bæk explained that the reaction could be split into two groups. One set of customers drew confidence from their business and continued to purchase stock, going about their business as usual, and the other set of customers decided to stop buying and assess the lay of the land. According to the Head of Sales for Northern Europe for Galaxy and Alliance, it was the first set of customers that came out stronger during the first stage of the crisis.
“The first group came out as absolute winners during Part 1 of COVID. They had stocks, and the demand was high. The guys who had tyres to support the farmers also came out as winners, at least for round one.”
And for round two? How did Bæk see this turning out?
“If I look at round 2 which for me is 2021, the picture remains similar in that everyone is clear that agriculture is going to remain.”
Following this, we turned our attention to looking at the main trends in agricultural tyre technology and how Bæk saw technology going forward in both the short-term and long-term. He began by underlining how developments were driven in the agricultural tyre segment.
“Developments as a tyre manufacturer are driven by development in the machine park. There is a long, ongoing trend that machines are continuing to get bigger, faster and heavier.
"Additionally, there is a demand for more versatility in the usage of the machines, so that you can use more implements on both the front and rear of your vehicle. Versatility in the sense that your tyres can go on-road and supply optimal levels of comfort.
"For off-road, customers want to see grip, traction, durability, but preferably to see all these characteristics in the same tyre. That is the trend as we see it.”
So, what does this mean for agricultural tyre manufacturers such as Yokohama OHT? Bæk was clear in his response.
“This translates into the tyre industry in the sense that you need your tyres to take more load, but preferably at lower ground pressure in order to spare the ground. Low pressure tyre technology has been there for 10-15 years and it is just becoming more and more relevant.”
Low pressure tyre technology does seem to be the talk of the town in the agricultural sector these days. The leading manufacturers across the board are continuing to release and roll out new and updated IF and VF options for their customers. As machines have become heavier and heavier, the demands on agricultural tyres have increased, as tyres need to be durable but also kind on the soil. Considering that at its core, IF and VF tyres were designed especially to carry more weight at a lower pressure, it's easy to see why manufacturers are steadily moving in this direction of tyre technology.
Bæk explains, “There continues to be a move towards low pressure technology in IF and VF tyres which can carry a lot at very low ground pressure. This is to offset the trend of machines getting heavier.
"We are trying to offset that in the tyre technology. That is there and is definite and you only see it picking up momentum. We’re seeing more and more tyre manufacturers coming out with tyres in these ranges.”
Despite the clear shift towards IF and VF tyres, we asked Bæk if he saw customers shifting more towards one specific classification of tyre over the other.
The Head of Sales for Northern Europe for Galaxy and Alliance answered, “I think in all honesty, IF was a stepping stone towards VF tyres, and if the trend goes on as it is now, you will see a VF Plus or VVF tyre coming out in the near future being the next level.”
Julia Verbunt, the PR and Communications Manager Europe for Yokohama Off-Highway Tires emphasised Bæk’s view that IF was a ‘stepping stone towards VF tyres’ by explaining further IF tyres’ positions in Alliance’s product portfolio. “We also see Alliance IF as an intermediary stage. So, what we have done and what we are doing is, we are launching more sizes in VF. Additionally, all the IF sizes that we have are also rolled-out in VF and in the future we are going to focus more on the VF programme rather than IF.”
This emphasis on the VF programme is further accentuated by Yokohama Off-Highway Tires’s plans to extend their 65 series portfolio, as well as offering VF tyres with a narrow rim option. The narrow rim option development is particularly significant. Since VF tyres usually have a wider footprint, they usually require wider rims when the tyres are changed. That is set to change with the narrow rim option, with farmers being given the option of using the same rims.
Verbunt explained, “Usually since VF tyres have a bigger footprint, it means they need bigger rims and that both the tyres and the rim need to be changed. Now, we are launching all those sizes with a narrow rim option, meaning the farmers don't need to change the rims, they only need to change the tyres.”
Bæk pointed out as well as the fact that the development of the narrow rim option had the added benefit of developing proprietary technology around the tyre, this advance is in part down to the company responding to the requirements of the modern-day farmer.
“The wider rims that came out in the beginning were also a way to build proprietary technology around the tyre. Nowadays, a farmer that bought a tractor with a standard rim, just wants the new tyre with VF tyre technology on their standard rim, meaning they don't want to change their rims as well. So, that is what we cater to with the narrow rim option.
“The growth that we have experienced in the last few years has been driven to a large degree by product development.”
This is no surprise. In our interview with Pravin Job, Galaxy’s Business Development Manager for Western Europe in August 2020, one of the key themes to emerge was the company’s commitment to product development across the board, not just in agriculture. This commitment, according to Job, highlights a key difference to the other manufacturers in that they offer the popular sizes and niche sizes to the customer compared to just the popular ones, allowing the Alliance and Galaxy brands to offer added value to not only the customers but distribution partners as well.
Bæk supported this later when he spoke about the developments and steps forward taken in the Agri Star range with another ’20 sizes introduced’ as well as ‘reinforcements to the Agri II series with new sizes and speed and load capabilities’. Bæk said, “We are continuously launching new products. This year, we have introduced another twenty sizes in our Agri Star range.
“We have also been introducing more VF tyres for the very large tractors, as well as a new range for radial flotation.”
To see a similar trend emerging in the agriculture sector for the company only further emphasises their confidence in sticking to their product development strategy to fuel growth.
So, in terms of the long-term future how does the future look for agricultural tyre technology? With autonomous vehicles and technology looming large, it’s possible that we could see significant changes in relation to the demands and requirements that farmers ask of the tyre manufacturers.
Bæk began by focusing on autonomous vehicles, “Looking forward to autonomous vehicles, and this is wild speculation from my side, I could see the trend [bigger, faster and heavier tractors] going the opposite way. As of today, the driver is the bottleneck factor of the machines and you want the machine to be as efficient as possible.
“I can imagine a place where you get satellite guided vehicles that are driven autonomously, and then maybe the machines could become small again, because you wouldn't need a driver anymore.”
Despite the fact that Bæk conceded his comments were “wild speculation”, it is much closer to reality that you might think. Autonomous technology already exists, and with farmers becoming more technologically advanced day by day, a world where the farmer is controlling five smaller machines instead of one large one is not as speculative as you may think.
Bæk concludes, “If you visit farmers nowadays, they are more advanced. For instance, they don't touch the steering wheel on their tractor, but they have to sit behind the wheel of that tractor.”
With product development driving a wide variety of offerings to European farmers, we asked Ole Bæk if there was a particular focus on specific market segments or geographies within Europe over the next year to help the company continue on the positive trajectory that it has experienced over the last year.
He clarified, “We don't have a particular focus on a specific market more than the other. Each geography has a unique set of demands and market drivers that sets them a little bit apart from other regions.
“We are in all the markets and have people focusing on their specific markets and making sure that the specific needs from their markets are being met.”
This is further illustrated by how Yokohama OHT is organised into North, South, East and West with local sales staff managing that sales organisation according to each region with for example a British employee working in the UK market and a Swedish employee managing the Swedish market.
In terms of products though, there has been a focused approach on promoting the new Agri Star II. The Agri Star II is a radial tractor tyre for 70 and 85 series offering a long quality life, higher traction, enhanced stiffness, a larger ground contact area and an increased front wall surface area, which Bæk referred to as ‘the bread and butter range of radial tractor tyres.’
This was backed up by Verbunt, “The Agri Star II is our latest tractor tyre in the market. In a year it has become a true European best-seller. Going forward this year and next year the focus is on the tractor segment with Agri Star leading this segment, but also followed up by our VF portfolio.”
With manufacturing facilities in Israel and India, the company has been accustomed to importing tyres into Europe and the UK for a long period of time now. However, the final place to stop was another external crisis in the form of Brexit. With a deal struck up late in December between the UK and the EU, the potential for chaos at the border was huge with little time to implement the planned changes.
Fortunately for Yokohama OHT, they seem to have felt little impact in terms of importing tyres into the EU and the UK. This according to Bæk was because the company was already operating ‘as an outside EU entity’.
He said, “So we are basically a non-European manufacturer, having production facilities in India and Israel. In terms of the paperwork around it, we haven't felt any impact, as we were already dealing as an outside EU entity.”
Bæk also had some words on the UK agriculture business. Since, it has become harder for suppliers to import and export food to the UK with the new set requirements thrust upon
them at the eleventh hour, we asked if they had seen any fluctuations in demand that suggested whether farmers were producing more or less in the UK.
He responded, “Whether the UK farmers are producing more, we don't know. We don't see that. We supply into the wholesalers in the UK and Ireland. We know they are doing well, but whether that means that the UK farmers are producing more and or less, I don't know.”
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