Al Dobowi holds inaugural Westlake Partners’ Day
The Westlake tyre brand is named after one of China’s most popular domestic tourist destinations and a 2011 addition to UNESCO’s World Heritage Sites – the freshwater West Lake in the centre of Hangzhou, the home town of its manufacturer Hangzhou Zhongce, located around 180km south-west of Shanghao. Shen Jin-Rong, Hangzhou Zhongce president and chairman, reflects with pride on the link between what is seen as a premier Chinese location and the tyre brand named after it: “Westlake is our tyre brand and also the best place in our city.” The Al Dobowi Group distributes the brand in several European territories through its Eskay Tyres subsidiary; the newly exclusive distributor of the brand in the UK was announced as Axle Group Holdings at the end of September – owner of the Viking International wholesale arm and the National Tyres & Autocare retail chain (see T&A October’s Wholesale feature and the Related News link below). Tyres & Accessories travelled to the town from Shanghai with representatives from the Al Dobowi Group to see the development of Hangzhou Zhongce’s manufacturing facilities, and to witness the growth in interaction between the manufacturer and European dealers of its Westlake brand.
In the most recent T&A survey of the world’s top tyre manufacturers (July 2011), Hangzhou Zhongce broke into the top ten, a rarefied position for an operator in its segment of the market, but one that the company is clearly intent on consolidating in the form of closer relationships with its dealers and the technological investment to allow it to meet those customers’ product requirements. Addressing the assembled dealers, Shen Jin-Rong said: “We are now the largest tyre manufacturer in China: we can produce nearly 10 million truck and bus tyres this year, and almost 20 million passenger car tyres across our factories. We are working hard to increase our market share; the increase in our market share is thanks to your hard work in promoting our brands. So: thank you very much and welcome to Hangzhou Zhongce.
“Also we hope that you can tell us what kind of product you need. You should tell us the weaknesses of our current products so that we can improve them in the coming years. Once we have improved our weaknesses we will be the top brand in the world – we want to produce the best tyres. Therefore we are willing to hear your comments and suggestions about our factory. If you have any suggestions or proposals, let us know.”
As was noted in the October 2011 edition of T&A, the manufacturer is pursuing prudent growth; an attitude exemplified by its intention to comply – ahead of time – with the raft of European legislation that some industry observers have characterised as a barrier to Chinese-made budget tyres. Even without the cynicism of this inference, it is undeniable that schemes such as REACH and now tyre labelling have provided an obstacle for Chinese tyres to overcome. While Hangzhou Zhongce’s initial approach has been, and continues to be, to invest in technological upgrades – according to the manufacturer, its globally-distributed tyres were made REACH-compliant six months ahead of schedule – another part of its strategy is clearly to seek greater involvement from its customers; hence the introduction of the Westlake Partners’ Day.
Harjeev Kandhari, executive director of Al Dobowi, explained that the event provided, and future Partners’ Days would provide, an ideal opportunity to interact with the manufacturer, particularly on their labelling requirements: “We have some dealers here today from Sweden, Portugal, Holland and Spain… We will do another day in March when we will bring the customers from France; the most important issue that Westlake needs to focus on is tyre labelling.” Kandhari told T&A in 2010 that “one of the best things” about another Chinese manufacturer with which it works was that “they really listen and react,” and it was clear from his attitudes to Hangzhou Zhongce that he believes the same applies to them. “Building happens so quickly in China,” he said, explaining that Hangzhou Zhongce had built its new PCR factory in one and a half years. Indeed, the company’s new manufacturing plants and its investment in new machinery was held up as evidence the company is ready to take on the challenges posed by labelling.
Shen Jin-Rong responded: “Our technical department has already done a lot of work on labelling; we started preparation some time ago… We can try to meet the requirements of customers – we want to supply the most suitable product for the market, so it all depends on what the market demands. As far as we know, a lot of Chinese manufacturers are going to give up, maintaining the original level [of tyre performance]; they are unwilling to meet the extra cost, and still lack the technical capability to meet the labelling requirements.” Addressing the dealers, he concluded: “We are ready for labelling legislation, and we are asking for your requirements so that next year we can supply suitable products for the market.”
Discussing the Westlake’s marketing strategy was Al Dobowi European general sales manager Jorge Crespo. He suggested that Al Dobowi continues to hold “discussions about channelling Westlake into the EU,” but that it has a “clear vision of how to commercialise tyres”. Crespo’s presentation made clear that the distributor plans to grow Westlake as a brand, with the current trend in “below the line” marketing such as trade shows, to be followed by promotion aimed at “the end-user”. Al Dobowi plans to mobilise its network of partners, generating ideas of how best to build the Westlake brand in different markets. Schemes to be launched by Al Dobowi in 2012 to support the brand include a 30-day “tyre warranty” in the UK, as well as a range of point-of-sale materials and van livery.
New factory and machinery
Assembled at the company’s current headquarters in one of its oldest remaining buildings the year before it will be replaced, Shen Jin-Rong told the dealers that the plant was: “built 53 years ago, so it is not in such good condition. By the end of next year, all the buildings and facilities here will be removed, and we will go to the new plant you saw this afternoon.” The plant in question was the new PCR manufacturing facility, around which the Westlake partners were shown, and in which T&A saw examples of European regulation-compliant tyres – colour-coded and labelled to distinguish products for export to the region.
Hangzhou Zhongce representatives were keen to show the investment that had gone into the new plant, including, explained export manager Johnson Su, European, North American and Japanese machinery from the likes of Rodolfo, VMI, Krupp and Fischer.
Hangzhou Zhongce’s modern facilities’ qualities were explained in the October edition of T&A (pp. 118-119), but to sum up briefly: Westlake tyres are produced in a temperature and humidity controlled environment, not commonplace in Chinese tyre factories. The firm invested around £30 million in one-stage tyre building machines along with ASTEC uniformity testers on PCR and TBR production lines. With Reach legislation compliance in mind, the company also invested in VMI Holland-produced tread wear analysis equipment, and raw materials and vulcanised rubber analysers. It has the MTS Flac-Trac III machine that the CEO of the Westlake brand, senior manager Mr Ge told T&A in March was helping to reduce rolling resistance. The company has an anechoic chamber for testing tyre noise.
Partners’ Day activities
After the presentations and factory tours, Al Dobowi was intent on entertaining its partners, taking them back to Shanghai for two days of sightseeing in the beautiful and historical classical Chinese Yuyuan Garden, the old buildings of the British area of the city along the riverside Bund, and the splendid French Concession. The partners were also taken to the observation deck of the Shanghai World Financial Centre, nearly all of the tower’s 492 metres high. The partners also experienced a Chinese tea ceremony, bartering for goods that may not have been entirely kosher in bustling marketplaces.
The weekend’s dinners were hosted at the sophisticated modern French restaurant Mr and Mrs Bund, situated in the historical Bund 18 building and overlooking the spectacular feats of engineering on the other side of the river in “New Shanghai”, and in the modern minimalist Japanese restaurant, Shintori.
Alongside the Chinese banquet-style food served during the rest of the week and the impressive tourist sites in Shanghai, Al Dobowi aimed to make the Partners’ Day an event to move the Westlake brand to the forefront of dealers’ minds in the European markets it serves. As a Chinese brand that is preparing to take up the challenge presented by EU labelling laws, it believes that the best way is to raise the level of investment in the brand of those responsible for selling it is to build the relationship all the way along the supply line of the tyre.
Related news:
- CZ Tire completes purchase of Hangzhou Zhongce share
- Hangzhou ZhongCe grows and grows – but prudently
- Westlake appoints Axle Group Holdings as sole UK PCR distributor
- Westlake to appoint new UK truck tyre agents
- ‘There are no bad tyres’
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