The 25th Anniversary Event for the Traxion brand from Vredestein was an opportunity to celebrate not only the launch of two new products into the Apollo Tyres family, the Endurion Trailer and the Flotation Optimall, but to recognise the success of Traxion since its inception a quarter of a century ago. During the milestone celebration, we managed to interview Benoit Rivallant, the President and CEO of Apollo Tyres Europe for 20 minutes about the brand’s success, it’s strategy in navigating a complex disrupted supply chain and how it plans to target 50% growth in the off-highway sector.
Rivallant Interviewed During Endurion Trailer and Flotation Optimall Launch
We started by discussing the success story of the Traxion pattern. Rivallant commented; “The Traxion 25 has been a large success story with people at the beginning not understanding that this pattern is the best. The Traxion 25 has been serving its purpose in that every tyre has been efficient on the road and in the field.
“Today we are in the Netherlands, which has large farms but more fields, and given that all the fields are surrounded by canals as the country is below sea level, this is why it has always been important for tyres to perform both well in the field and on the road.”
During the welcome briefing, Rivallant set out the path for the company to achieve 50% net growth in the off-highway sector which includes both agricultural, mining, industrial and construction. For context it is worth underlining that the Vredestein brand serves the agricultural segment, whilst the Apollo brand serves other applications such as mining, industrial and construction, thus ensuring there is no cross-over or competition between the two brands. At the moment, the agricultural segment makes up about 90-92% of their business in these two areas, and, according to Rivallant, agricultural tyres will remain “the lion’s share of that” as was illustrated by Guido Boerkamp, the Director for Off-Highway Tyres Division at Apollo Tyres.
Rivallant added, “We believe with our manufacturing strategy that we are well equipped. We consider that with our people, we have the understanding and knowhow by being present in both Europe and India. With India being the biggest agricultural market in the world, it means that we know everything from very small equipment to very large equipment.
“We know our business. We have research and development in both India and Europe. We have the people and the manufacturing, and we are future ready.”
A key component of Apollo’s strategy focuses on the quality of their team and their product, with the manufacturer continuously investing in both areas. Whenever Apollo targets a new market, it establishes a strong team to support the growth, whether that is with people in the field or the back-office functions. In addition, Rivallant explained how digitalisation was impacting their growth strategy, “We need to consider as well that the product is digital and that it is digital in two aspects. One is the product and the other is the relationship between the customer and us, which is what we are working on.”
The fruits of some of these efforts will be seen at Bauma shortly, when Apollo Tyres rolls out its TPMS solution for the sector at the trade fair.
As for Apollo Tyres’s distribution strategy, it is a long way from their direct offer that have had previously in the truck tyre segment. These days the manufacturer opts for tyre specialists who are able to mount and repair the tyres, offering a high-quality service to the customer. The company also implements a team in every country to provide recommendations directly to the farmers. The CEO of Apollo Tyres Europe said, “We have the responsibility with our partner to satisfy the customer. We need to provide tyres, but if the farmer cannot get the right fitment, we have not been successful. We always want to go to the farmer with the right service provider.
“Our strategy is to go with independent tyre fitters and retailers. The independent will be called at 8 at night or 5 in the morning meaning they will come at any time. That is the best match.”
Rivallant also confirmed Boerkamp’s comments in an earlier interview that the manufacturer will expand the Apollo brand and the construction portfolio of tyres, with the line-up being produced in India. Regarding production, he said, “Production capacity is full in the Netherlands and will remain so, but what will evolve is the mix of products that we produce in Enschede.
“That is why we have announced a new round of investment in the Enschede plant as we need more capability to create these larger tyres. This will create more tonnage in the plant, and it will grow marginally. All our small sizes will need to be produced in India to remain competitive, but it doesn’t mean that the plant is at risk as it will grow with bigger and bigger sizes.”
For Apollo Tyres to deliver on this growth in the agricultural, industrial and construction tyre segments they will need to ensure that their supply chain is at optimal health. Over the last few years, global supply chains have been rigorously tested from the pandemic to the container crisis to the Ukraine war to the HGV driver shortage. It has felt like it was never-ending.
Rivallant explained that in the face of these crises, the manufacturer decided to identify every product or element that was used in its production process where they only had one supplier or in other cases one supplier in one continent and try to find new back-up suppliers to future-proof their manufacturing. The next hurdle that is coming into view is the Europe-wide inflation and energy crisis that we are seeing, and unfortunately Benoit Rivallant conceded that there was no other choice but to increase prices.
“It is clear we are in a period of inflation. When we look at the impact of inflation and energy increases, unfortunately it means that the price must go up, otherwise we are at risk. We haven’t announced a price increase until the end of the year. Additionally, we have already had a series of price increases, so we will be watching the market until the end of the year.”