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COMPANY NEWS
Galgo Steps Up European Initiative
manufacturers and the retreaders. The trade can take heart from the investment in retreading by the tyre manufacturers. It might create some challenges for the independents, but it also signals that the tyre manufacturers believe there is a future in retreading. It says that the tyre manufacturers know that it is possible to meet rolling resistance, fuel consumption, and by-pass noise levels with retreads. Has Galgo got provision in place to deal with tighter tyre testing and labelling? “Of course” says Ibarzabal, “this is a critical development for the retread sector, but the EU is not alone in tightening the regulations. In the USA we have had two of our Galgo Pre-Q treads passed as SmartWay approved. SmartWay is currently only mandator y in California but it is expected to be spread across the USA. So, we are presenting treads to that programme for approval and are being successful. There is no reason to think that we cannot also meet requirements in Europe. The issue is not really with the compounds or the tread, we can match them, but for the retreader the issue is the impact that the casing has on performance and how they will manage that element of the package. “It is important for us that when operators use our treads that they
are Galgo has two treads happy approved by the US EPA for with its Smartway Programme them.
Not just
in terms
of wear and tear and performance, but also in terms of driver comfort. This is especially important on long haul operations. So we are always working towards improving our offer, and programmes like SmartWay can be a help by setting us a standard to meet. We can always aim to exceed that standard.”
One of the challenges to retreaders worldwide is the advance of budget brands from the Far East and Asia. Is it fair to say that these are also an issue for Galgo? “Chinese tyres are an important presence in the market
but one of the tasks of the retreader is to extend the life of a tyre casing. The retreader helps the fleet operators minimise whole life tyre costs. So whilst many of these low price brands come into the market, both here, and throughout the world, they have to compete not just against the retread, but the combination of the new tyre and the retread, which together give a better cost per kilometre, even if the initial tyre cost is higher. We know that the quality of these low budget tyres is increasing, that in turn pushes the manufacturer’s costs up and the prices up, and in turn it creates opportunities if they compete on price, and if the casings are better then it creates opportunities to retread.
“The other advantage that the retreader has over these low budget tyres,” continues Francisco “is that the manufacturers do no marketing. They simply sell on price. So the retreader can market his products, he can sell on the advantages of the retreads rather than just looking at the price.
“What we are doing is starting to learn about the different Chinese brands. We need to know who and what we are dealing with. Is this tyre retreadable? Is that one not so good? If we know then we can deal with them.”
So, with Galgo established as a brand in Europe, where is there room for expansion? “Expansion? Well in a mature market expansion is always by increasing market share and we are always working at that. However, there are opportunities in markets where retreading is not yet fully established. Eastern Europe
holds some promise, the growth of the EU has seen an increase in trade and a growth in fleets based in Eastern Europe so there are clearly opportunities to meet the growing retread sector in those countries. We can go to them with treads and materials at a good quality and the right price and service. We need to balance these three areas in order to
Mexican rubber specialist Galgo has been operating a distribution warehouse in Tongeren, Belgium for some years now. The operation was initially headed up by the late Joe Krimpenfort and under Joe’s
in Mexico service the European market? “We have sales representatives who are experienced in the market.” Says Francisco, “They know the clients and they understand their needs. We ensure
Francisco Ibarzabal, Commercial Director Galgo
direction Galgo made quite a splash when the Pre-Q brand arrived in Europe. So, 10 years down the road Retreading Business was interested to know how business was developing for Galgo.
Francisco Ibarzabal, the commercial director, was in Europe for a team meeting at Tongeren and took time out for an interview with Retreading Business.
The key question for everyone is how is the market trending in Europe today? Is there a recovery? Has the crisis impacted upon trade? Francisco answers, “The market in Europe follows the economy. If the
economy is poor the trade is down, if the economy picks up, then transport picks up, tyre use increases and sales of tyres and retreads increase. In some areas we are seeing increased activity as economies recover. I believe that in relation to the markets in Europe we have been quite successful with the Galgo brand, based on our quality and our service.”
It is worth noting that Galgo’s warehouse is situated at the headquarters of Belgian transport company Jacobs, with trucks operating throughout the Benelux area and further afield. So, Galgo has direct access to its haulier so can be both rapid in turning orders around, and with trucks coming and going on a daily basis, next day delivery is usually a real option, within transport distance of course.
How does a company headquartered
that they also understand our products and our capabilities. We give them a good programme of products and we back that up with technical support from Mexico and Tongeren. We are close to the market and we have the ability to meet the needs of the market both at a suitable cost and with a very good quality product.
“We can respond quickly because we learn the needs of the clients and we established a stock level here at Tongeren that means we always have the products that the clients need. It has taken us time to refine our stock levels to the point where we know that we have the right materials for the right markets. We are constantly analysing the trends in the market and adapting our stock to match those trends. If we see that our customers’ needs are changing we alter our stocks to match their needs.”
The need to match the needs of the customers is key to any business, and smaller compounders and suppliers talk of being able to modify compounds and patterns to suit specific client needs; Is that something that can be done remotely from Mexico? “I think that we need to be wise to the world. People sometimes sell on a promise. We sell on what we produce. We can deal with some changes in compound, if there is sufficient volume to justify the work, but we have to be realistic and look at the return on investment “This is true not only in Europe, we often find that what is needed here is also needed somewhere else, so we may actually have that special pattern or compound available and be able to supply from Mexico for a specific client here. That would of course be their special compound, if they like.”
Tyre testing and tyre labelling are big issues in Europe, both for the tyre
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