VMI – reinventing how tyres are produced
Visit a tyre plant anywhere in the world, and the chance of encountering equipment manufactured by the VMI Group is very high; the Dutch company, which began business in 1945 repairing war-damaged industrial equipment, is today easily one of the top producers of machinery for the global rubber industry. These days equipment produced for the tyre industry accounts for around 80 per cent of VMI’s global sales and the company has been a dominant force in tyre building machinery since its development of the single-stage process in the 1970s. This landmark concept brought about a revolution in production process quality, and in the years since its release VMI has repeatedly shown its strengths as an industry innovator; the latest developments from VMI, and those just around the corner, suggest the company’s tradition of innovation still remains very strong.
“We have quite a unique way of developing products,” shares VMI Group CEO Harm Voortman during an interview with Tyres & Accessories. “Unlike many other machine suppliers, who are driven by customer requests and then work under time pressure to develop new technology for an order that has already been placed, our years building up experience and relationships within the industry place us in a good position to independently develop new machinery to an advanced stage, free from these constraints. We have strong contacts and relationships with all the global players, which helps considerably when looking at the market and foreseeing what it will want in three to five years.”
Voortman explains that VMI aims to think far ahead, and to transform ideas into marketable products it operates according to a continuous three-year production development plan. “We write a three-year plan then adjust it every year,” he elaborates. “We begin a new project with a feasibility study; after that a concept is presented, then detailed engineering. A prototype is then built and fully tested before being further tested and optimised at a customer’s site for a couple of months. This last stage is important; you need customers to work with you if you really want to do something truly revolutionary. Especially in the final phase, you need to work together with them.”
This collaborative input was crucial in the development of VMI’s latest flagship line for its strongest product area, the fully-automated Maxx tyre building machine. “We were already the market leader for passenger car tyre building machines but we decided to start all over again. Based on what we knew from 20-30 years of supplying tyre building equipment to the market we came up with a new concept. This is an example of a project where our knowledge of the market and products was such that we could do the first stage ourselves. We worked together with Nokian tyres in Finland for the final stage; the Maxx tyre builder is now a tremendous commercial success in the Western world.” No truck tyre version of the Maxx is currently built, however Voortman says “it is very likely that in the coming years there will also be quite a dramatic development in truck tyre machinery.”
The advantages offered by the Maxx tyre builder include a higher output – the Maxx can produce some 1,800 passenger car tyres per day (the current record is 780 tyres in one shift) as opposed to the 1,200 to 1,400 maximum of the previous VMI series – however Harm Voortman is convinced the range, which was introduced in late 2008, offers manufacturers something far more important – consistency. “Our customers don’t share quality figures with us, but we have found out that the difference in tyre uniformity between the best available non- VMI products and real VMI technology is at least 10 per cent or maybe 20 per cent. This is a vital difference if you are an OEM supplier; if you are able to work very consistently at OE quality level you can charge more for your tyres.”
The Dutch manufacturer opines that the key to improved tyre uniformity lies in automating as much of the tyre building process as possible. “At VMI we definitely believe that our customers, the tyre producers, should minimise, or even take out completely, the influence of operators on product quality and output,” Harm Voortman comments. “If you have a factory, you need a lot of people to run the factory but you don’t want people to influence quality and output factors. People building tyres themselves should be history. That is our philosophy, and everything we do in R&D is working towards flexibility and full automation.”
To remain the global market leader in the tyre building machinery sector – Voortman reports that VMI holds somewhere between 60 and 70 per cent of the open market for these products – the company has constantly needed to move ahead with the latest technologies. The CEO comments that tyre building machinery requires flexible but very precise equipment and that a great deal of high-tech equipment, such as camera systems, high-speed checking devices, servo motors and linear motors, go into a modern tyre building machine. “Over the years we saw that some technology was lacking, for example in the area of extrusion,” he notes. “So in 2004 we acquired a German company named AZ Extrusion, and that company still has its own market it supplies but we also use these extruders in our latest developments in the tyre building area. In 2008/9 we also acquired a company with strengths in robotics, EBM Product Handling Systems. This acquisition allowed us to develop the automation we use and the automatic handling of products to a very high level, one that was not yet seen in our market. So now, if you look at the latest developments in our machines, such as the Maxx series, you will see this technology.”
A high level of automation makes for a consistently good product, and in a perfect world all tyres would be manufactured using the best techniques available. But in reality cost factors also play a role and not every tyre maker is prepared to invest in state of the art technology. “Some customers don’t want full automatic,” Harm Voortman observes. “It is my strong belief that, even in countries where labour costs are low, it is still advantageous to remove operator influence in the interest of product constancy. But there are two reasons why people hesitate to adopt full automation. One is the cost; you need to buy robotics, and this has its price.
“Emerging markets now account for over 50 per cent of our business,” Voortman continues. “We supply more machines in Asia than in the west but the machines are less expensive. Asia is an important growth market for us. We are seeing a shift; the big Western players are setting up in Asia and they acknowledge that labour costs are less there, so their first impression is to go for less automation. But they still want a reliable supplier they are used to. VMI assures them a certain level of quality.”
The other main reason some tyre makers decide against fully automated tyre builders is that a fully-automated line requires high-quality components at every stage. Automated component handling requires consistent high quality and any variations caused by upstream equipment cannot be compensated for without stopping machinery and losing production time. “This is the main driver for certain customers in certain regions to still want operators in front of the machine who can correct certain splices and the like. A person is always very flexible – he sees, and he can correct,” says Voortman. To cater for this market, VMI offers a range of tyre builders intended for use with an operator; these machines are partially based on previous VMI products yet have been incrementally updated in order to stay ahead of the competition. To keep costs down this range is mainly produced by VMI’s subsidiary in China, VMI Yantai Ltd. The core technology still comes from the plant in Holland, however.
Regional plants assure global competitiveness
This operation in China started out as a joint-venture facility 15 years ago and VMI acquired the other party’s shares a couple of years later. Today the plant in Yantai, Shandong Province supplies electrical cabinets and other components to VMI’s main plant in Epe, the Netherlands (where all core VMI products are built) and assembles the abovementioned units for emerging markets. China’s lower production costs enable VMI to remain competitive in the growing Asian market and the Yantai site, which employs around 300 workers, is currently being expanded with a new facility to meet growing demand. According to the VMI CEO, the entire global market could be serviced from the Epe and Yantai plants, however the Dutch firm has invested in a third sizable production facility. “We are starting up in Brazil,” Harm Voortman elaborates. “It has taken us a lot of time, I think four years, to establish an entity over there that is able to perform the final assembly of equipment. The plant there is still small at the moment but it is working and supplying equipment, and we plan to grow it in the coming three years to a full-blown VMI production site for the South American market.” The reason behind this investment, he adds, is to give VMI a competitive edge in Brazil’s notoriously protected market. Import barriers and tariffs make supplying Brazil and South America from the Netherlands an economic impracticality. The company’s fourth production facility, incidentally, now plays a reduced role within the VMI Group; full-scale production at the VMI factory in the US state of Ohio ceased during the recent economic crisis, and the plant is now mainly engaged in retrofitting.
While tyre building machinery is VMI’s greatest strength, the Dutch company also produces equipment for most stages of the tyre making process. “We supply machines for cutting, splicing and extruding,” Voortman comments. “We’re not yet the market leader in this area but we are a very ambitious company so we definitely want to grow there.” Another potential growth area is that of batch-offs. These were the first products VMI supplied the tyre and rubber industry back in the 1950s – Vredestein was its first tyre industry customer –however the high price tag traditionally attached to these units has by and large restricted the market for them to the specialised technical rubber industry. Until now, that is. The company CEO shares that VMI has been able to reduce production costs over the last couple of years through its plant in China and it is now supplying batch-offs to some of the top-five tyre companies there. This is, Voortman adds, a business that VMI is definitely interested in expanding.
“We’re very ambitious, we have a lot of plans to grow,” Harm Voortman continues. “An area of the tyre business where we still can grow is the component preparation (cutting lines, extruder lines, splicing lines) side of the business. We’ve invested a lot of product development into this specific area; we can definitely grow there. And if you look at the tyre building side of the business, are we still able to grow there? I think so, as our main competitors are no longer other machinery suppliers; rather, they are the tyre manufacturers that still produce their own equipment themselves.”
These manufacturers building their own production equipment are the ‘captive’ market, one that VMI has largely yet to tap. “In the open market, where we have been active for decades, we have a huge market penetration,” Voortman comments. “There you see maybe five per cent growth in tyre production annually, and this additional production volume needs machines. But that is not the double-digit figures we are looking at, so the main focus for us is trying to convince the captive market that it can be very beneficial to work with us. That will take time, as such a working relationship is based on trust. The advantage for them is very simple; we supply the majority of the market so it is logical that we can develop equipment more cheaply than they can themselves, and we can also put more effort, cost-wise, in the whole development process.”
Harm Voortman is not able to officially comment on VMI’s growth aims; the VMI Group is part of the TKH Group, which is listed on the stock market in Amsterdam, and no official figures for the VMI Group itself are published: “But if you look at our budget for product development, which has been increased dramatically in the last two years, and the fact that we’re expanding our factory in China, this shows that we are very confident that we will grow.”
Rethinking the production process
Growth in the next few years will not occur through the introduction of specific new machines, Voortman opines. Rather, it will involve a whole new way of looking at tyre production. “So far we have been developing machines in the traditional process,” he explains. “But ten years ago we started a project called MTM, a revolutionary new concept for building tyres in a very flexible, modular way. The MTM system has been running at Marangoni in Italy for the last couple of years and is now producing 1,000 tyres a day in a very flexible way. I think this is still a showcase of what is possible, technology-wise, but it has not really picked up in the market – yet.
“I think if you look at VMI’s developments in the coming five to ten years, it will be more process-driven, changing the way tyres are produced rather than optimising the steps involved in the machines we have now,” Harm Voortman continues. “So the real game-changer will be in changing the whole production line. It’s very capital intensive right now, it’s very energy intensive, with a large footprint. And those three elements need to be downsized. The goal is to reduce these while adding flexibility and fully hands-off production. And for that you need a different production process. I think that in the coming years that will be the main goal in our research and development. We will step away from the traditional processes and develop machinery for this new way of thinking about production. You need to have a vision for that, and we are developing this in stages. In the coming years you will see machines that are part of this new concept coming on the floor.”