IMPETUS FROM GERMANY
FROM ELLERBROCK TO MARANGONI
By changing the name of Ellerbrock, the German company owned by Marangoni and the protagonist of the pre-cured market for trucks in centre-north and east Europe, the Trentino group sets the tone for a global brand consolidation strategy with renewed ambitions and new investments
Mino De Rigo
Investing in Germany to increase growth on the global market. An endless road to internationalization begun by the Marangoni Group with the acquisition twenty years ago of Ellerbrock, the pre-cured strips and rings factory in Hamburg. The one that is now changing its name to Marangoni Retreading Systems Deutschland to seal the success of the long integration process. The one that could see its output doubled by 2013 thanks to a second Alpha Ring production line and a new 6-million-euro mixing plant, thereby emphasizing Germany's centrality, not only geographically-speaking, and the importance of its market for retreaded tyres for trucks. As Marangoni CEO, Massimo De Alessandri, emphasized "Not only does it represent a privileged platform for exports to Scandinavia and fast-growing countries in the east, the German-speaking area also has the largest concentrations of automotive industries and, in addition to being an economic engine, it is the driving force in terms of technology and standards for the tyre sector". In other words, strong control of this market is more than ever an essential prelude to expanding business inside and outside Europe. So much so that in Germany Marangoni has an entire portfolio of products, a turnover estimated this year at 50 million euros (only slightly less than an eighth of the group's total turnover which is expected to be 420 million at year end), and where MRS Deutschland represents a third - in both value and volume - of the entire Marangoni Retreading Systems division.
Critical mass for the brand
Another element has been added with the recent acquisition of Wenzel Industrie, a Bremen company that sells the group's industrial tyres for lift trucks and earth movers throughout the German-speaking area. "With the change of name" - De Alessandri commented - "we achieve critical mass for the Marangoni brand. We will also take advantage of the successful combination of Made in Germany, which is perceived by the markets as state-of-the-art technology, and the ability to innovate that is associated everywhere with Made in Italy". The twenty years that followed the acquisition of the factory in Hamburg, to which Marangoni gave control of a commercial area that is worth more than half of the entire European market, served to built a common identity. "We have done excellent work" - stated Paolo Fincato, head of corporate strategy & development - "in integrating the respective company cultures and the relevant approaches to the market by exploiting their complementary nature. Along the way, we have eliminated overlapping by rationalizing the product portfolio, unifying administration, IT and logistics systems, and dividing the geographical area of reference". Experience in technical and industrial fusion that the group was able to draw on in the subsequent stages of the internationalization process, starting with expansion to Brazil. Matthias Leppert, general manager of MRS Deutschland, said: "During the first decade after the acquisition, the reciprocal exchange of know-how laid the foundation for the joint development of new compounds while work continued on the redefinition of responsibilities from a commercial aspect.
Integration for a common identity
"In 2003, the start of the production of pre-cured Alpha Rings coincided with the acceleration and complete integration of the harmonization process, which involved processes and logistics structures". Situated at Hensted-Ulzburg, a short distance from Hamburg, the factory occupies 26,500 square metres, employs 120 people, and has an adjoining, 13,500-square-metre logistics centre. The factory uses 12,000 tons of compound and has a yearly production of 5,500 tons of Profil Liner tread strips, 2,000 tons of RINGTREAD pre-cured rings (an amount expected to double in 2012), and 1,500 tons of rubber products for retreading. 80% of products are made with about half a dozen compounds, while about twenty other compounds are used for the other applications. The core business is the RINGTREAD ring; each one is created in a centripetal press which immediately gives the tread the shape it will have when it is applied to the casing, thereby avoiding tension and deformation that could affect performance, and without the classic joint of traditional cold retreading. With a yearly turnover of about 32 million euros, MRS Deutschland has cut itself a slice equal to a fifth of the German market for the reference sector. "We are counting" - Leppert maintains - "on consolidating our share in the German-speaking area, increasing coverage of Nordic countries, penetrating east Europe and countering low-cost competition with quality services. In Russia we can depend on considerable potential for growth". And in the other markets of the BRIC acronym, where the Marangoni group is already present.
Markets with strong growth
"If in Europe" - commented Giuseppe Ferrari, director of the Retreading Systems division - "we foresee a marginal increase in our share (now 25% of cold retreading), then in South America the expansion of the business started up in Brazil, Argentina and Chile should make us the reference brand, and in China, where we have been for half a decade, we will soon open a production site for the local market. We are also aiming to double our current share (to reach 10% within 5 years) in North America", where Marangoni can count on a premium market positioning. "The world retread market is worth 60 million units: demand is stable in Europe and in the Americas, but it is increasing in other areas, especially Asia. Everywhere, the trend is for "new" retreads and quality retreading, which is our objective, and with an estimated total of 25 million units it is decidedly growing". In India and China the demand for quality retreads is still marginal, but increasingly widespread radialization is laying the foundation for a sudden change. "Moreover" - De Alessandri added - "it is maturing fast, as demonstrated also by the Chinese government's development programme which reiterates the importance of retreading tyres, an environmental conscience that urges waste reduction and the saving of resources. And given the incidence of raw materials on costs, recovering tyres for retreading will always be more cost effective".
• An integrated industrial company with a global calling
Distinguished by its integrated approach to tyres, the Marangoni Group makes this its main weapon: from the production of industrial machinery to the development of technologies and materials for retreading, from the manufacture of new tyres to retreading. After a difficult 2009 marked by a downturn in business, last year the group began to grow again and had a turnover of almost 400 million euros. "An increase of 33%" - said CEO Massimo De Alessandri - "due to the increase in volumes, the contribution of machinery and demand from overseas. In 2011 there will be another step forward, probably 5% more, thanks to the revised portfolio mix and pricing policies. The general increase in new products has allowed more profitable pricing and with it, wider margins for retailers". As far as the division of turnover is concerned, 62% is attributed to the core business, with the biggest slice, 38% of the total, from products in the Retreading Systems division, which leads the way in the global expansion strategy. Then come commercial and industrial tyres and manufacturing machinery which come to 24%. Completing the picture are tyres for cars (21%) and distribution (17%). The record for turnover by geographical area returns to Italy with 35%, followed by Germany with 10% and the rest of Europe with 21%. Overseas, the North American and Latin American markets stand at 9% and 10%, respectively, and the remaining 15% goes to other countries, with Russia and China at the top of the list.