With new acquisitions, SAF-HOLLAND is not only expanding its product portfolio, but also its global footprint. The acquisition of the York Group, a manufacturer of trailer axles and suspension systems, opens up access to the Indian subcontinent and Asian-Pacific market. The Italian coupling specialist V.ORLANDI enhances the Group’s range with new components. Dr. Matthias Heiden, CFO of SAF-HOLLAND, explains the strategic importance of the new family members.
York Transport Equipment (Asia) Pte. Ltd. is headquartered in Singapore and operates trailer axle and mechanical suspension system manufacturing facilities in Pune, India, and Qingdao, China. York serves the majority of the truck and trailer manufacturers in the Asia-Pacific region and is represented not only in India, but also in other fast-growing markets such as Thailand, Indonesia, Vietnam and Australia. York has a strong market position, especially in the heavy-duty segment with a gross vehicle weight of nine tons or more. In addition, the York Group is one of the major suppliers of parts and accessories for trailers and semi-trailers on the Indian subcontinent with a network that includes more than 200 service points and dealers.
V.ORLANDI S.p.A. is a manufacturer of coupling systems for trucks, trailers, semi-trailers and agricultural vehicles based in Flero near Brescia (Italy). Before being acquired by SAF-HOLLAND, V.ORLANDI was the third largest manufacturer of fifth-wheel couplers in Europe and is now strengthening SAF-HOLLAND’s position as the number two in Europe. At the same time, SAF-HOLLAND is expanding its specialty business with couplings and drawbar eyes for trailers and vocational trucks. V.ORLANDI currently generates around 20 percent of its sales from the industrial, agricultural, forestry and mining segments. The company manufactures at two locations in northern Italy near Brescia. In addition to Western Europe, the company’s products are mainly sold in Russia, Asia and Australia.
“We focus on the fastest integration possible to avoid losing any of the initial momentum.”
In 2018, SAF-HOLLAND successfully completed a number of acquisitions. How do these acquisitions fit into your overall acquisition strategy?
Dr. Matthias Heiden: As far as acquisitions are concerned, our strategy focuses on three areas: our product portfolio, our global presence and our technology. Our new acquisitions fit precisely into this framework. V.ORLANDI is a medium-sized company that first and foremost enriches our product portfolio. In addition to classic fifth wheel couplings, V.ORLANDI also offers products that were not yet a part of our portfolio such as coupling systems for agricultural vehicles and mining vehicles. In fifth wheel couplings, V.ORLANDI is currently the number three in Europe. Now, following the acquisition, it is strengthening our number two position in this segment even further.
Expanding our global footprint is also firmly anchored in our 2020 strategy. SAF-HOLLAND has a strong position in Europe and North America for historical reasons. With the acquisition of York, we are now expanding our business in India – one of the fastest growing trailer markets in the world. But that’s not all: York also serves many of the neighboring markets in the Asian-Pacific region, such as Thailand, Indonesia, Vietnam and Australia, from India. We will now be better able to approach the fleet customers in these markets who are interested in trailer axles and suspension systems than we were before.
What advantages do you gain in terms of customer access in India through your acquisition of York?
Dr. Matthias Heiden: In India alone, we now have around 200 service outlets from the York acquisition that we can rely on. This expands our worldwide service and spare parts network to more than 10,000 outlets. It is important to understand that the road infrastructure on the Indian subcontinent is different than in Europe or the United States. Above all else, this requires tailor-made products that meet the actual needs of our customers. It also means that the trailer axles and suspension systems need to be as cost-effective as possible while, at the same time, offering the quality required. That is why service and application-related development play a particularly important role in these markets.
Technologically, SAF-HOLLAND has placed the digitalization of the trailer at the forefront of its “Smart Steel” campaign.
Dr. Matthias Heiden: That’s absolutely correct. This was the rationale for the acquisition of the British technology company Axscend. Our colleagues there are working on digital trailer management, both in terms of hardware components and in the development of software. This acquisition also opened the door to new business models, for example, based on the analysis of other important trailer data that Axscend already records today, beyond the condition of the brakes.
What approach will you take to further integrate York and V.ORLANDI?
Dr. Matthias Heiden: The first step is to take a clean inventory. With this information, we already developed an integration concept during the two due diligence periods. Now we can focus on integrating these companies as swiftly as possible – for example, through the quick integration of the sales activities – so that we don’t lose any of the initial momentum. We are also looking for synergies in processes and administration, such as in the areas of finance or IT. And thirdly, we are analyzing synergies in purchasing. But, above all, it is important to get people on board – and this is where a coherent integration strategy can help. In the end, however, it is also important that local management be easily approachable.
thank you very much for the interview.