Marangoni consolidates European presence, renames Ellerbrock
As of 1 September 2011, Ellerbrock Reifenrunderneuerungs-Technologie GmhH, which was acquired by the Marangoni Group in the early 1990s, officially began trading under the name Marangoni Retreading Systems Deutschland GmbH. And in order to explain the rationale for this move, its recent performance and the company’s vision for the future, Marangoni invited Tyres & Accessories to see the fast growing Marangoni Retreading Systems Deutschland operation first hand and hear from executives at the same time.
Marangoni Retreading Systems Deutschland’s facilities in Henstead-Urzburg cover an area of 26,500 square metres, with an additional 13,500 square metres occupied an accompanying logistics centre. The facility, which currently employs 120 people, manufactures Profil Liner pre-cured tread strips and Marangoni’s trademark pre-cured rings for truck tyre retreading.
Expansion and investment
Following a history that includes a couple of unfortunate fires, the company decided to press on with investments made into the factory by the Marangoni Group in 2009. These saw the site equipped with the latest technology available in the sector, as well as advanced machinery developed and built specifically by the Marangoni group, such as the Alpha Ring automated production line.
But the expansion didn’t end there. This year 5,500 tonnes of flat treads will be produced. Another 2,000 tonnes of Ringtreads are produced annually on top of this. And walking around the production plant it is clear the company is ready now and has already made space for its plans to double Ringtread production in 2012. In addition, Marangoni announced plans to increase its compounding capacity by 50 per cent from 12,000 tonnes with the addition of new Banbury mixers in this production stage. Work for this part of the expansion programme is scheduled to begin in 2013.
The manufacture of Ringtread pre-cured rings was an innovative concept introduced by Marangoni. And to this day no-one else is producing anything quite like it. Every Ringtread is made individually in a centripetal press, ensuring that the tread takes on the final form it will have once applied to the casing right from the very start of the production process, without any tension or deformation that may affect performance, and without the “splices” that are typical of traditional cold retreading. The unique technology has opened the way for Marangoni to partner with new tyre manufacturers.
The operation now known as Marangoni Retreading Systems Deutschland GmbH was founded in 1919 by Heinrich Ellerbrock in Hamburg. It has been part of the Marangoni Group since 1990. In order to expand further, the German company moved from its original location to its current site in Henstead-Urzburg in 1993. The move was completed in 1995, and for the following decade the focus was on technical and industrial integration with other Group plants, so as to develop a global supply network capable of meeting the needs of different markets and customer segments.
Currently the German company produces cold retreading materials and technology, with annual sales of 32 million euros, and supplies around 20 per cent of the German market in its sector.
How the Marangoni Deutschland move fits into the company’s wider strategy
Remember the re-organisation of Marangoni that saw the company bring its different retreading and machinery production operations under one corporate roof? Marangoni’s management sees this re-organisation as “anticipating” what happened during financial crash. But while the company is confident, executives are also equally frank about the uncertainties of the future. Will there be a double dip?
In terms of financial results, 2010’s figures marked recovery from the 20 per cent drop in sales the group business experienced before. During this period sales grew back up to 399 million euros. However, full-year 2011 sales are expected to reach more than 420 million euros due to the positive impact of improved price mix and higher volumes. The reasons for the recovery the year before were different. On this occasion they were said to have been down to greater international sales and increased demand in the company’s machinery business.
Paolo Fincato went on to explain how the latest developments form part of the company’s new decade of the new millennium strategy. Following the purchase of the Ellerbrock Reifenrunderneuerungs-Technologie GmhH, between 1990 and 2010 Marangoni went through two decades of what it called “branding the merger/merging the brand.”
At the beginning the two firms were basically separate businesses and even competed with each other from time to time. At the turn of the millennium the brands and product offerings were merged. Now as we enter the third decade of the two firms’ increasingly close relationship, the truck tyre retreading market is growing globally making the European market look relatively small by comparison. For this reason, integration and consolidation – in terms of solidification – appears to be the Marangoni Group’s (and the former Ellerbrock business’s) preferred option.
Global thinking
One example of how European retreading fits into the rapidly growing global scheme of things can be seen when comparing the European and the fledgling Chinese retreading businesses. Already Chinese retreading has grown between 12 and 15 million tyres a year. In the whole of Europe retreading is roughly half of this at around 6.5 million units annually. In this context the mature markets need creative approaches and innovation and the fast-growing emerging markets are becoming too important not to be involved with.
As a result, after a string of recent announcements relating to its South America presence, Marangoni executives shine more light on the company’s China plans. According to the company, Marangoni is “scouting for a small industrial presence to serve the domestic Chinese market.” However when pressed on the subject it is clear it is looking to build a plant of the kind of scale that is economically viable, but also enables a flexible presence in the market, with room to grow if necessary. A plant at the small end of the pre-expansion Henstead-Urzburg scale gives a good impression of what this might mean.
The quality of tyres produced and sold in the Chinese domestic market is said to be “improving”, meaning it is unlikely that there will yet be a shortage of casings. The problems are more a question of logistics and mentality, more about convincing fleet and customers of the importance of correct first life running conditions and the concept of keeping casings with retreading in mind.
Is a partnership with a local Chinese manufacturer a possibility? In a word yes, company executives explained, but it’s difficult to choose the best partner from the numbers of brands on the market. There are also political considerations. It is unlikely that Marangoni would want to alienate any of its European new tyre partners for the sake of a new relationship in China. And therefore a more complete answer to this question is “still too early to say.”
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Marangoni consolidates European presence, renames Ellerbrock
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