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COMPANY PROFILE

2013

LOMBARD TYRES 30 years and counting for Lombard Tyres


30 years

COMPANY REPORT

and counting for Lombard Tyres Editorial – Roland Douglas Production – Tonnie Geddes Lombard Tyres is celebrating 30 years in business and to mark their anniversary the company is engaging with the community more than ever. We speak to CEO Renier Botha, to find out more about the company’s success and their plans for growth in the future.

30 years ago, Mr Mauritz Lombard and his wife opened a small shop selling tyres to motorists, located next to a service station in Gauteng. Today, the company is one of the largest independent tyre dealers in Southern Africa. The growth of Lombard Tyres since 1983 has been nothing short of astonishing. In a market full of big name competitors, Lombard Tyres has had to be innovative and astute to achieve its development. IndustrySA recently had the chance to speak to CEO Renier Botha, to understand more about the history of the business and the plans to ensure that their fantastic growth continues. “We’re thirty years young this year. We were established in 1983 by Mr Mauritz Lombard with the

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help of his wife Chrissie. Mauritz is still the owner, his focus and role is to ensure continued growth. “It started with one shop, next to a service station where Mr Lombard used to sell tyres. Over the years the business has grown and now we have 18 retail outlets, ten warehouses spread across the major cities in SA, we import Kumho tyre products from South Korea, we have the sole distribution rights for the Kumho passenger, light truck and recreational tyres in Southern Africa and we are also exporting to other African nations. “We have a commercial truck division and a Bandag Retreading factory so the business, from one little shop 30 years ago, has grown into quite a big corporate company.”


LOMBARD TYRES

“We have a fully equipped training facility called the Kumho Africa Training Centre. This is the first Kumho training centre on the African continent”

LEADING THE RACE The Lombard Tyres business has many strengths, one of which is the ability to service all sectors of the market with products available for the general public as well as commercial businesses. The flagship product comes from Kumho Tyres, a company famed for producing Formula 3 and Le Mans winning racing tyres. The company has recently demonstrated its technological capabilities by developing a tyre for Formula 1racing. Kumho Tyres is a South Korean business and the ninth largest tyre company in the world. The name ‘Kumho’ means ‘beautiful calm lake’ in Korean.

“The largest part of our business is passenger and light truck because of the Kumho product that we import and distribute,” says Mr Botha. “The truck division is also a large part of our business. We have a number of large fleets that we service through our truck division and we also do retreading for our customers. It’s probably 70/30 passenger and light truck to heavy truck.” The company has seen growth recently with two new retail outlets opening in SA and further facilities opening in Africa. The Lombard Tyres retail network supply more than just Kumho tyres. As Mr Botha explains, the business can offer a full range of automotive services:

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COMPANY REPORT

LOMBARD TYRES Secondly; the global economy, in its current state, is not providing the perfect springboard for any business to grow and take advantage of new opportunities, particularly a business that deals heavily with imports. “We are feeling the effect of the slowdown, especially with imports. Since January 2011 until now the Rand has weakened against the US Dollar in excess of 35% and that has a huge effect on us, it’s something we have to factor in all the time to make sure we remain competitive. We weathered the 2008 GFC (Global Financial Crisis) and stand prepared to overcome the challenges that the current recession poses. “There is also a high import duty on tyres, around 30%, so we have to make sure we are on the ball and factoring these things in to participate in a very competitive SA market,” says Mr Botha.

A COMMUNITY COMPANY

“Through our retail shops we supply all other products as well as the Kumho product. We sell other manufacturers goods such as Goodyear, Continental, Bridgestone, Dunlop and Michelin, and in most of our shops we supply all other services including wheel alignment, balancing, fitting of shock absorbers, brakes and under carriage work including replacement of parts. “In the last 12 months we’ve opened two more retail outlets. We have now finalised another warehouse that we opened in Maputo, Mozambique and we are in the process of opening a warehouse in Mauritius. We’ve stepped up our exports to other African nations, we now distribute to Namibia, Botswana, Zambia, Malawi, Zimbabwe, Mauritius, Mozambique, Lesotho and Swaziland.” Like so many successful African companies that originate in South Africa, Lombard Tyres has realised the importance of the continental demand and is expanding to take advantage of new markets. However, there have been two things that have slowed this progress down. Firstly, international business has its bureaucratic drawbacks, with red tape often proving frustrating. “We are establishing our footprint through our wholesale division and we are looking at opening retail facilities but it can be difficult to deal in Africa. Just to open our warehouse in Mozambique it took a number of months to get through all the red tape,” says Mr Botha.

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In their anniversary year, Lombard Tyres have been looking to give back to the one stakeholder that has given so much over the last 30 years – the community. In February, the company visited the West Rand Association for People with Disabilities (WRAPD) and the Moria Old Age Home as part of a ’30 Days of Care’ campaign, one of the campaigns scheduled throughout the year that will see the company engage with and uplift local communities. “There are very few people, especially in the tyre business, who can say they’ve been in business for 30 years. We are under no disillusions, we know it is the community that made us and supported us,” says Mr Botha. “It is important to give back to show our appreciation for all that the community has given to us over the years. We have been involved in community projects for a long time but we decided that as this is our 30th year in business we are going to concentrate more on community projects as a means of saying thank you.” The campaign saw Mr Botha, along with other members of the management team, visit the two centres and dish out Valentine’s Day gifts to staff and residents. As well as promotional campaigns like this, the company also helps the community by up-skilling youngsters and creating jobs. “We have a fully equipped training facility called the Kumho Africa Training Centre. This is the only Kumho training centre on the African continent. The centre is fully equipped with classroom facilities and we have a workshop so we can teach the practical side of things too. We teach fitting of tyres, balancing and wheel alignment. This makes us different to other training facilities.


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COMPANY REPORT Promoting good service throughout the company is an on-going process with initiatives in place to ensure service quality is frequently reviewed an improved. “We have a lot of innovative projects going to improve service in our retail shops. We have a mystery shopper who goes in with a hidden video camera and we review the service and retrain the staff members where they are going wrong, we are very strict on this,” says Mr Botha.

A COMPETITIVE INDUSTRY

“We have a very exciting recruitment program where we take young school leavers and intensively train them through all different departments in the company. We then test them on the knowledge they have gained and employ the successful students,” says Mr Botha. The company believes in promoting from within and this allows for employees to gain a comprehensive skill-set which in turn leads to improved service. “People must have a goal, something to work for, so bringing in these young adults at the bottom and promoting them through the company improves skill level and motivation. In such a competitive market, the only thing that is going to differentiate us is service and skill level is vital when delivering good service,” explains Mr Botha.

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Although Lombard Tyres is one of South Africa’s tyre and automotive industry leaders, competition is rife. To ensure they stay on top of the pile, the emphasis on growth and quality service is now bigger than ever. Mr Botha tells us that the competition is strong, creating a tough industry but he also reiterates that the company is in a good position to take advantage of some relatively unexplored markets with its fantastic, exclusive product range. “We are one of, if the not the biggest independent dealers in Southern Africa. We consider ourselves as quite a large and responsible role player in the retail and wholesale market. There are around 2000 independent tyre dealers in SA trying to make a living in a market with 9.5 million vehicles, this is really competitive and challenging. “Kumho research and development is very strong. There is a huge untapped market with 4x4 and light truck vehicles but we are small part of the Kumho export machine. “We certainly want to grow in the 4x4 market, the product has proven itself in all fields and quality speaks for itself. When a customer has fitted a Kumho, they return for same product as the quality is of such a good nature,” says Mr Botha. With positive repeat business, a constant focus on quality service, ambitious growth plans and a welltrained workforce derived from the local community, it looks as though Lombard Tyres has positioned itself to mount a full charge on the continental market while remaining an industry leader in South Africa. As the partnership with Kumho flourishes, it is clear that Lombard have a product range that sets them apart from the rest. “We have such a wonderful product,” says Mr Botha proudly, and who would bet against the company being not only an industry leader in South Africa but Africa as a whole when they reach their 50th anniversary in 20 years’ time.

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LOMBARD TYRES

“When a customer has fitted a Kumho, they return for same product as the quality is of such a good nature”

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+27 11 951 5900 www.lombardtyres.com

(0)1603 618 000 info@industrysa.com East Coast Promotions Ltd, Ferndale Business Centre, 1 Exeter Street. Norwich, Norfolk NR2 4QB


Lombard Tyres