Oudshoorn: Vredestein tires 'will be rolling out' of new plant in 2007

Aug. 31, 2005

The Amtel Group recently announced the creation of the Amtel Vredestein Group, a new tire manufacturing group already manufacturing Vredestein tires in Kirov, Russia.

In the following speech, Robert Oudshoorn, general manager of Vredestein Banden, Holland, revealed some of the new company's plans. (Oudshoorn was addressing media during a recent press conference in Moscow.)

"In order to understand the potential success of Amtel Vredestein a bit better, I will have to tell you something more about the company Vredestein that has recently been acquired by Amtel.

"Vredestein Tyres is a company that started off some 70 years ago as a joint venture between the Dutch Vredestein rubber company and the American B.F.Goodrich. In the '70s, the joint venture ceased and Vredestein was on its own in the arena of fiercely competing tire manufacturers. It took 20 years before a private group of investors bought the company in 1991 and started a turn around of the company.

"Subsidiaries were sold, closed or reorganized and others were acquired. The core business that stayed was the tire division, a profitable company with a somewhat grayish image.

"In the early '90s we really started working on this image. We did realize we had to position ourselves differently from the big players in the tire industry. We had to turn our relative small size into a strength, which meant we had to be lean, mean, efficient and fast.

"Our organizational structure became flat, assuring short communication lines, and our focus on the replacement market allowed us to frequently introduce new product lines.

"Our strategy is: introducing many new products, in ever higher market segments, with the help of good marketing and sales people. In order to be as close as possible to our customers, we created a network of wholly owned sales offices in almost all Western European countries.

"Our shareholders allowed us huge investments to buy the equipment for the ultra-high performance tires we wanted to manufacture. They have never been disappointed.

"The end result is a very profitable company with excellent products in all kinds of interesting segments. What separates us from the others is without any doubt the close cooperation we enjoy with Giugiaro Design, the famous Italian top design house, well known for the superb designs of the latest Bugatti, Maseratis, Alfa Romeos, but also the very first Volkswagen Golf.

"Together with Giugiaro Design we created the successful tire lines of Sportrac, Ultrac, the fast winter tire Wintrac Xtreme and its sister, the Wintrac 4 Xtreme for SUV's.

"Obviously, this success has not gone unnoticed, and in the middle of last year the first contacts between Amtel and Vredestein were established. It was clear from the very beginning we had a typical win-win-win situation here. Good for Vredestein as we needed better access to the eastern countries and to low-cost production for the lower segments, good for Amtel in order to get access to the European market, to excellent tire technology and production know how.

"And, apparently, it was good for the former Vredestein shareholders, as they agreed to seriously negotiate the transfer of the company. Negotiations started, due diligence reports were made and the necessary financing was organized in a relatively short period of time.

"And just to show the world that we meant business, Amtel and Vredestein agreed to start immediately with a number of important projects, such as the manufacturing of Vredestein tires in the Kirov plant and the setting up of a grand marketing, sales and production plan for all plants involved.

"I am more than happy to say that those plans are well under way, the first tires have been produced in Russia to the exact same specifications as their Dutch counterparts, and there is a comprehensive plan for the investment in a new, highly sophisticated tire plant Voronezh II, where Vredestein tires will be rolling out as from 2007 onwards.

"And I am proud to say that, despite language and cultural differences, both Russian and Dutch employees with great enthusiasm and determination carry out those projects.

"So today we are introducing the Vredestein brand in Russia. Just looking at all the radical changes in Moscow in the past few years, we can safely say there is definitely a place for a high quality, high performance brand in this country.

"Looking at the new, design-oriented lifestyle in Moscow, the Giugiaro touch in the Vredestein tire designs, will undoubtedly find a good resonance here. And with the dedicated help from our friends at Amtel Vredestein, we can be sure the introduction and the marketing of our product will be a success.

"I sincerely hope you will now understand a bit better why the combination of Amtel and Vredestein is a winning team and why we both are happy this merger has become a fact. Rest assured you will hear much more positive news from Amtel Vredestein in the coming years."

Amtel Holdings Holland N.V., parent company of the Amtel Group, finalized its purchase of Netherlands-based tire manufacturer Vredestein Banden B.V. in April.