An independent tyre company since 1946, VBBV became a part of AVNV in April 2005. AVNV’s bankruptcy has not affected the Netherlands-based VBBV, which continues to remain a viable entity with a ring-fenced financing arrangement and a turnover of approximately Euro 307 million for 2008.
Vredestein’s manufacturing unit is located at Enschede, an 1.5-hour drive from Amsterdam. Over 70 per cent of the 5.5 million tyres manufactured every year are high performance, high speed passenger car tyres with speed ratings of up to 300 kmph and sold primarily in the European Union. Vredestein enjoys high brand recognition in Europe for its performance tyres and also manufactures a second brand called Maloya.
The acquisition strengthens Apollo Tyres’ ongoing plans for the European market and provides Vredestein with opportunities to leverage its proximity to a larger industry player in terms of costs, people, products and access to markets beyond the European Union.
Vredestein has an established network of sales subsidiaries spanning key countries in the EU and the US. Over 30 per cent of VBBV’s products are sold in Germany, with the rest being sold across the EU and other parts of the world, including the US and the Middle East.
“This is a strategic alliance for us and will bolster Apollo’s plans for its European customers,” commented Onkar S. Kanwar, Chairman & Managing Director, Apollo Tyres Ltd. “The fit between the two companies spans the entire spectrum of R&D;, products and people to manufacturing and markets. It is a synergistic match and our aim is to increase Vredestein’s global value in the coming years.”
Vredestein Banden BV currently employs around 1,500 people and is managed by a core group of senior managers, with vast experience in the tyre industry and a strong track record of profitability. The company has constantly notched a CAGR of 8.5 per cent in revenue over the last five years, a figure that is significantly higher than the industry growth rate in Europe.
“This alliance is a win-win combination for both companies,” adds Vredestein Banden BV’s Chief Executive Officer, Rob Oudshoorn. “We will bring to Apollo our edge in passenger car tyre technology alongside an understanding of the European market. At the same time, Apollo can offer us access to the non-European markets, valuable manufacturing expertise and assistance with lowering costs by leveraging the purchasing power of a larger entity. I have closely watched Apollo’s acquisition and integration with Dunlop South Africa, and the way they went about the merger speaks highly of the Apollo management’s outlook on people and implementing best practices.”
Oudshoorn is also positive on the next steps: “This partnership with Apollo will bring the desired level of stability to our operations and our people. We have gone through a period of uncertainty, and I am positive that we now have the right platform to truly harness the growth potential, of which Vredestein is capable in the future. We have the people, we have the technology, and now we have the right partner.”
Reinforcing Oudshoorn’s thoughts, Neeraj R. S. Kanwar, Vice Chairman & Joint Managing Director, Apollo Tyres Ltd., observed: “We will continue to run Vredestein Banden under the leadership of the current Vredestein management. As is our norm, the idea going forward is to ensure we leverage on each other’s strengths for combined benefits and better products and services for our customers.”
Neeraj Kanwar added that a comprehensive integration process would begin within a month. Areas of particular focus will be research and technology, products and brands, corporate purchase and finance. At the end of the process, which would involve managers from both companies, a consolidated plan for the short and medium term would be put into action.
The acquisition process began in November 2008 when a global bidding process was initiated by Amtel Vredestein NV. The process culminated with the signing off on all requirements, overseen and authenticated by the Supervisory Judge in the Almelo Court in the Netherlands.
