Van den Ban – ready for the next 40 years

In August 2009 Dutch wholesaler Van den Ban Autobanden opened its new ‘Logistic Tyre Centre’ in the town of Hellevoetsluis. Those seeking a detailed description of the hi-tech warehouse facility can find it in the March 2010 edition of Tyres & Accessories, yet it is definitely worth mentioning that the material handling system used is without parallel in the tyre industry and enables the fully automated and mechanised internal transport, sorting and order picking of all tyres housed within the 24,000 square metre building; last year it smoothly dispatched more than 5,0 million tyres to customers throughout the region. Back when the centre opened, construction work on Van den Ban’s new administrative headquarters was underway on an adjacent greenfield site; last October this new head office building officially opened, marking the conclusion of Van den Ban’s two-stage expansion project. The wholesaler says it is now fully equipped to take on the ever evolving market and any challenges it may bring.

“We are ready for the next forty years,” comments managing director Frans van Lenten of the four-decade old company. “Our warehouse and IT system capabilities have been developed and we have been able to broaden our range of SKUs. Our focus now is, more than ever, on offering a one-stop shop – so if a customer is looking for something Van den Ban is always the top priority, whatever size or brand is.”

The brands Van den Ban offers its customers throughout Europe include premium and well-known brands, accompanied by the wholesaler’s private and exclusive brands. The main two private brands remain Novex, which is produced by Maxxis, and Blackstone, a range manufactured in Europe by Continental. A new addition last year was Chinese budget brand Suntek: “We are adding new Suntek sizes almost every month, for instance 4×4 sizes, and we expect to have winter tyres available for the next season,” van Lenten shares. “We are also planning to introduce winter sizes into our other Chinese budget brand, Hi-Fly.”

These winter ranges, along with the other cold weather tyres the wholesaler sells (van Lenten comments that Vredestein is an important range for the company in the Dutch market), will be warmly received by customers following the season we’ve just experienced. In Europe the winter of 2010/11 was, as most readers are aware, punctuated by demand for winter tyres that often considerably outstripped availability. The managing director notes that “at certain times some fast moving items were hard to obtain,” however he adds that prior planning and purchases made throughout the season enabled Van den Ban to remain very reliable towards its customers in terms of supplying their requirements.

Taking measures ahead of the market

“We now want to extend this reliability in the coming season – not just the coming winter season but also now with summer tyres,” van Lenten continues. “The way we handle our stock for our customers is of course for us a key success factor. It is really important. We try to be informed at the right time so that we can take measures ahead of the market. At the moment we have higher stock levels than at this time last year but it is obvious there will be pressure on availability in the coming months at least.” One knock-on effect of a far higher rate of winter tyre usage in winter 2010/11 is, he adds, that demand for summer tyres will be higher at tyre changeover time.

It goes without saying that high levels of demand for tyres is a good thing as far as wholesalers are concerned, and van Lenten agrees. Yet when speaking of the industry in general he points out that there will be some bumps in the road in 2011: “Everybody expects a good year for wholesaling and distributing tyres, but on the other side the industry will see availability problems, cost increases and resulting price increases from manufacturers. This has of course been seen to a higher level in Asia than in Europe. For Asian manufacturers the sources are typically places like Thailand and the Philippines. This is a problem as crops have been very bad due to weather conditions, and this has made rubber prices go through the roof – and prices are being driven even higher by domestic demand from countries like China.”

Price gap between European and Chinese budget brands narrowing

High domestic demand, higher material prices and other factors are driving the cost of Chinese budget brands in one direction: “Prices for Budget tyres as a whole will increase further this year,” van Lenten opines. “This already started in the second half of last year. If you see the cost development of raw materials then you’ll see increases for most of them of between 20 and 80 per cent. Natural rubber is always mentioned but prices for other components such as steel and carbon black are going up. Costs are also influenced by the euro/dollar rate.” The Van den Ban managing director admits that prices for European produced budget brands will also increase, yet these recent market developments have levelled the playing field somewhat. “We saw an increase in budget ranges from China in the last three years. This is a trend that continues but it may slow down this year as the price gap between European and Chinese budget tyres is narrowing. In 13-14 inch sizes, for example, sometimes the Chinese brand is more expensive than a European budget. That of course is going to affect sales.”

This development has not altered Van den Ban’s commitment to its Chinese sourced budget labels, however. As commercial manager Cyril Versteeg points out, it is still very much possible to obtain a good value for money Chinese budget tyre – the emphasis at Van den Ban has been on finding a product with the right level of quality at an attractive price. “When we started with Chinese brands we took the decision not to just have a brand because we could,” he comments. “The focus is still on quality, we wouldn’t just put any Chinese brand on the shelf. When it comes to quality, how they are performing after a couple of years is the proof of the pudding – if a tyre is not good your customers will definitely give you feedback. We are happy with the Suntek, Hi-Fly and Sunny ranges we have today. ”

Van den Ban remains committed to delivering affordable quality through its budget ranges in the UK, as UK sales specialist Michael Noorland explains. He says that Britain is a massive budget market within Europe – his figures indicate the budget sector accounts for 60 per cent of the UK replacement passenger car tyre market. “Many of these budget tyres are shipped straight from China into the UK and they are the budget end of the budget market, he comments. “We don’t touch products like these, therefore the bigger part of our UK sales are for branded products.” Noorland adds there is no sense in becoming embroiled in a budget tyre price war in the UK market. “We want to continue offering quality budget tyres, we are happy with the tyres we offer and have not had any problems with them, and we don’t want to lower our quality standards. When we sell tyres we don’t want to end up receiving half of them sent back.”

Reliable supply all-important in 2011

In conclusion, and looking ahead to the remainder of 2011, both Cyril Versteeg and Frans van Lenten foresee that availability and material costs, including price fluctuations brought about through exchange rates, will remain the main issues. “An underlying trend this year will be a bigger than ever necessity to have reliable stock for customers,” Versteeg comments. “And that’s of course what we’re working on very hard every day. Although the circumstances are tougher we are very positive about it, that we can still keep our market position as a total tyre supplier. That’s what we’re focusing on every day right now, that can extend and build up on last winter and previous seasons.”