When Cleveland-based Soberay & Sons shipped a multi-million dollar consignment of a large lot of OTR, farm and military tyre machinery totalling 150 containers recently, it represented the company‚Äôs growing global market leadership in this segment of business. The equipment was sourced in Rumania and sold to a large tyre maker in South East Asia.Currently, Soberay is rebuilding seven extruders and an F270 mixer for a new Indian tyre company, which is scheduled to start manufacturing next year. The order is being executed closely on the heels of shipping to the same company nearly 100 containers of quality used equipment. Today, the Soberay‚Äôs order books are full and its reputation built over 70 years for reliability, quality and adherence to delivery time is felt across the world.
Three generations of impeccable business tradition. Over 70 years of flawless reputation and integrity. That is what drives Cleveland-based Soberay & Sons ahead. It is being swamped with orders for second-hand machinery and equipment. They have reposed faith in the quality of the machines that Soberay supplies.
The company has a proven record of supplying quality used and rebuild tyre and rubber machinery for three generations. It still rebuilds 25-30 extruders per year as well as mixers, mills and calenders at its facilities in Cleveland and Akron.
The market trend that it sees is that clients are now choosing to take quality second-hand equipment instead of rebuilds. It helps them to press down the capital costs without compromising on quality and productivity.
‚ÄúThere are many great opportunities now for the savvy buyer to purchase great machines which can simply be moved and put back into service with only electrical upgrades that may be desired,‚ÄĚ Director Ryan Soberay told Polymers & Tyre Asia.
And what is more, the kind of savings that companies gain is enormous. ‚ÄúA tyre company can expect to save 40-50% over the cost of a new machine by going for rebuilt machines with original equipment (OE) clearances on all mating surfaces. When buying used equipment from Soberay the savings can be as high as 75-80% compared to new,‚ÄĚ Ryan said.
‚ÄúFor example, we currently have two numbers of complete 270 litre tangential mixer lines available with carbon black systems, charging, mills and batch offs. These machines were rebuilt one-two years prior to the plant shut down and have 80-90% life of a new machine. Clients can purchase them at 25% of the cost of new machine,‚ÄĚ he said.
Simple math shows that this is a great value for money. And that is what the client understands while approaching Soberay.
It is now liquidating a compression press plant suitable for moulded goods or solid tyres. ‚ÄúThere is always a large list of available equipment on our website soberaysons.com,‚ÄĚ Ryan said.
Soberays pledges to continue offering quality rebuilt and second-hand equipment that would satisfy the most demanding clients. ‚ÄúThis is why the Soberay family has been in the industry for nearly 70 years, and God willing for another 70 years more,‚ÄĚ Ryan‚Äôs father Ron said.
Reaching out to clients
The highest growth market for second-hand and rebuilt rubber and tyre machinery is Asia, particularly India, Ryan said. ‚ÄúThe tyre industry growth in Asia is attributed to the hard work and dedication of its people. We are constantly impressed with the work ethics of our Indian and other Asian clients.‚ÄĚ
To facilitate the clients, the company is leveraging the Internet to speed up order processing and communication. ‚ÄúSoberay & Sons is one of the first companies in its industry segment to create a website ten years ago in 2001,‚ÄĚ Ryan said with pride.
Search engine rankings are dictated primarily by cumulative hits and the Search Engine Optimisation (SEO). The longer a website is online, the more hits it typically gets which keeps it at the top.
Soberay enjoys high-rankings in most of its machine categories and its recent acquisition of the domain name tiremachinery.com has also helped it further. The website inventory is updated twice daily and lists most of its stocks.
The cyber presence has been of great help to clients. During these boom times in India, most managing directors and project managers are overworked and often rely on junior executives to collect quotes and information on machines when a need comes up. The younger generation will typically turn to the internet for this.
‚ÄúIf you Google 270 litre mixer, equipment listed by Soberay & Sons appears at least seven times on the first page itself,‚ÄĚ Ryan said.
‚ÄúAs long as we are in the top five position, we will usually be presented to management as an option. The MD will typically know our name from past dealings, reputation or print ads, this secures us on the bid list‚ÄĚ noted Ryan.
Near local markets
Besides advertisements and the website, Soberay promotes hundreds of videos on YouTube, equipment offerings on EBay and Alibaba, Google Adwords sponsorships, besides Facebook and Twitter presence.
‚ÄúThese are only a few ways in which one could utilise the Digital Age more effectively to inform potential audience of our offerings and to help educate them on the same.‚ÄĚ
Email marketing is another important tool, noted Ryan. ‚ÄúWe are now able to stay in weekly contact with thousands of our clients and suppliers with our latest purchases and equipment wanted lists‚ÄĚ.
Conveying information like this previously used to take two weeks. The company had to mail out printed mails and physically send them through posts, or call people from a long list.
However, Soberay always felt that it needed a presence near the market in India, besides other growth markets such as Korea, Thailand, Taiwan, Malaysia, Vietnam and South America.
Encouraged by the exponential rise in demand for its machinery, Soberay is now studying the possibility of opening a warehouse in the south Indian state of Tamil Nadu, known as the Detroit of East. Most major global auto and tyre companies have operations there. It is also planning to open facilities for servicing and refurbishing machines.
‚ÄúWe believe that we are supplying the Indian market efficiently without having physical inventory there,‚ÄĚ he noted. ‚ÄúUntil the time that the Indian warehouse is open, our clients there will continue to be supplied quality machines form our warehouses in Ohio and other storage locations,‚ÄĚ Ryan said.
Huge growth potential
While Soberay had already sold four complete tyre plants in China and one in the Middle East by 2000, Ron was struck down with a heart condition and had to go for bypass surgery and Ryan did not want to further burden his dad with business. So he took on the reins of the business at a time when the demand was booming in Asia.
The Asian market, in particular India, has been really coming into its own as a world force in the manufacturing of tyres, and it has become apparent to Soberay that it is necessary to have a closer supply base there.
‚ÄúWe could fill the rising demand by establishing re-building operations in Asia, and most logically in India. Unfortunately these plans had to be delayed, as it was simply too much to ask Ryan to work to establish such a facility, and carry on the business immediately at hand, by himself,‚ÄĚ Ron said.
Soberay has enjoyed significant business in Asia and India in particular. But Ryan sometimes feel frustrated that he is not able to move faster enough and more decisively to meet the high demand for which company has had plans set in motion over ten years ago.
‚ÄúHowever, we continue to explore, possibilities, which we are confident, will come in due course,‚ÄĚ Ryan asserted. ‚ÄúThe markets there will be strong for many years to come. We are confident in our abilities, about our market awareness and our market acceptance. We know that there is always room to be made for a dealer/re-builder with know-how and integrity.‚ÄĚ
And Ryan has time on his side to further build on the reputation gained over 70 years and three generations. He is capitalising on it as seen in the growing client list and surging order books.
Stamp of quality, reliability
As a major supplier of rebuilt machinery, what is your assessment of the tyre industry growth in Asia?
There will be strong growth in the Asian tyre market for a minimum of ten years. A recognisable distinction between India and the rest of Asia is evident. The shift in tyre manufacturing from Industrialised nations has not been completed, allowing the Asian markets, in particular India, to flourish. India has spawned an infectious enthusiasm that can be seen in virtually every level of industry over much of Asia. The people are hard working and have greater dedication to growth and development compared to the rest of Asia and the globe.
We are continually impressed by the work ethic of our Indian clients. For example, we receive calls during our work day in the US which equates to a very late night for our foreign counterparts. Overall, we notice a prudent and frugal drive from our Indian clients holstering an assessment where savings can be garnered without loss of functionality or application. They arduously and intelligently strive for answers and solutions.
We see India as being in a position for the most dramatic and sustained growth for multiple reasons. First, as common in most Asian countries, India has a strong work ethic in conjunction with a growing domestic market. With a stable and dedicated government, India supports international business and the use of the English language throughout their commerce. I noticed the importance of a shared language when I was still in high school. When I was 17, I went on a business trip to Shanghai with my father. At dinner there were businessmen from Japan and China. The discussion was entirely in English. It is the way it is, not to anyone‚Äôs choosing.
Secondly, India used great vision and wisdom early on to ensure that they did not capitulate their industries to the international ‚Äúmega-corporations‚ÄĚ. This nurturing of home-grown companies has resulted that in India the leading tyre manufacturers are Indian-owned companies. This has multiple positive effects. From the beginning, they are ingrained in the entire process, from the material to marketing. This alone distinguishes India from other Asian countries, as well as, Eastern Europe and South America which have only manufacturing in their grasp. The international marketing experience is often nonexistent. Indian companies have over fifty years of experience with the entire picture. There is a deep understanding of what their customers want and how to meet their demands. The entire organisation is attuned to the importance of each customer and their need, harnessing an ability to participate in the growth and capitalisation of the business.
What kind of demand growth do you see for rebuilt machinery in the coming five years?
This year we are on track to mark our highest export to Asia for over 10 years. As internal consumption in India grows along with larger exports, we are confident about the continued strong demand from the region. Aside from the global recession, India was able to reach another record for auto sales.
Rebuilt machinery is a stable part of the machinery market because of the value it represents; allowing available funds to increase in a growing market, for example. Also, used machinery will continue to see growth due to the excellent machinery being spawned by the shift of manufacturing tyres from North America and Western Europe. The Industry will still be in growth stage in the coming five years.
What are the major growth markets for your rebuilt machinery?
The major growth markets for our machinery are free market areas and countries which allow the principles of companies to exercise their intimate knowledge and entrepreneurial skills when selecting capital equipment. A company, encouraged by rapid growth, will amplify their demand for rebuilt machinery as cash is a more critical commodity. The small to large companies have advantage over the mega-mega international companies that buy used or rebuilt machinery. The mega-corporations tend to buy used or rebuilt machinery when a specific set of circumstances dictates. The reasons for this include, standardisation advantages as it reflects on spare-part stores requirements, as well as the difficulties that arise with the multi-tiered decision-making process they all have when it comes to capital expenditures. Also, the mega-corps are not set up for fast decision-making; this is often called for with regard to buying used or rebuilt equipment. Our equipment is available only when it is available, unlike ‚Äúnew‚ÄĚ which does not have a time line. Therefore, it is the small to large companies in free market areas that have the advantage with regard to prudent purchase of used or rebuilt machinery. I might note that India is far ahead in all these categories compared to their global corporate competitors.
What are the machinery and equipment that have the highest demand?
Machinery related to mining and agriculture is in high demand. OTR tyres, conveyor belt, high pressure hose, and ball mill liner manufacturers are all running at full capacity. Cold feed, as well as pin barrel cold feed extruder sales have steadily increased as some markets look to minimise the labour and floor space required for hot feed extrusion. Consistently, all of the basic processing machines such as mixers, mills and calenders are of mature design and of durable construction, with wearing components that need to be considered and well understood. Ancillary equipment and the control area have shown great improvement in the recent past, upgraded on the basic machine in most cases.
How much, on an average, can a tyre company hope to save in capital investments through acquisition of rebuilt machines from you?
The traditional benchmark for a fully rebuilt machine has been 60% of the cost of a new one. One third of that 60%, in the way of component parts, will be new. The savings on the used part grows to 50%. In today‚Äôs market ‚Äúbenchmarks‚ÄĚ can get distorted. Currently, many machines are available that do not require as many new components, if any. As always timing is critical to the purchase of used machinery, particularly in today‚Äôs market. With regards to purchasing of rebuilt machinery, it is advantageous that we know as far as possible in advance specific considerations. This especially applies to mixers, calenders, and most of all, any ‚Äúlines‚ÄĚ being considered. Line equipment is often very expensive and the savings for used can be even greater for these heavy machines. Historically, the majority of line equipment is abandoned or scrapped when removal is required. By its construction and nature, it is often unfeasible for a wholesaler to remove and store line equipment until a customer comes along.
What level of technology sophistication that you can bring to rebuilt machines to ensure competitive productivity and output?
The mechanical technology for the basic processing machines is very mature. Most significant advances were already in place by 1970. Parallel to the industry, Soberay and Sons has grown with the highest technical sophistication available. If necessary, modifications can be made to incorporate a desired feature if not originally built into the basics of the machine. What needs to be carefully watched is that the sophistication being considered is in concert with the application as it concerns line speeds.
Sophistication often demands a higher initial cost as well as greater maintenance costs.
Most significant upgrades in the recent past concern the controls, particularly as it relates to lines of equipment. New controls are also often desired because each plant or company has technical people familiar with a specific control ‚Äúmain frame‚ÄĚ as well as computer supplier. Therefore, it stands to reason that a customer accustomed to Allen Bradly will think twice before putting in a sophisticated Siemens computer control, for example.
How do you service your potential clients offshore and what is the infrastructure that you have to assure quicker service for clients?
We currently supply parts from our headquarters in Cleveland, Ohio, where we maintain a large supply of standard spare parts. In regards to installation assistance or start-up/training services, we employ an extensive network of experienced persons who are utilised as needed. With four plants in Asia to our credit, we are capable of covering any assistance required. In practice, many of our buyers have established their own means of installation and service, perhaps out of necessity but also, prudent fiscal concerns.
What are your plans regarding warehouse and stocks in the Asian region as that would help you to be near your customers?
We are currently exploring what I consider our best possibility to date and sincerely hope to make an announcement before the close of 2011. We realise the advantages of being on hand and properly represented in Asia. Understandably, we are losing orders on sales of machinery under Rs 2 million as it is often difficult to justify such a trip when weighed against the proposed purchase. We believe that the opportunities in Asia will be strong for decades to come. From experience, we know that there is always room for another good, qualified company in a growing market. We will be there for these reasons: Dedication, integrity and knowledge. The company will certainly progress as well as flourish in a traditional Soberay manner with these fundamentals.
Passing the¬† torch
Ryan Soberay is a man in a hurry. He has inherited the passion for business from his father Ron and wants to ensure that the company lives ups to the reputation that is built among clients over seven decades.
It is this passion that drives Ryan to work as hard as he must, to succeed in a competitive world. In the past few years he has proved that the trust reposed in him by his father and clients are stronger than ever. He is committed to further build the business on the reputation for flawless ethics and a deep fundamental understanding of the business field.
In the 1930‚Äôs, Ted Soberay (Sobieraj) Sr began working as a machinist for an up and coming machine shop called The Stewart Bolling Company, which is now KOBELCO Stewart Bolling, Inc. They built processing machinery for the rubber industry, including mixers, mills, extruders, calenders, and hydraulic presses. They were second only to Farrel in North America.
Ted‚Äôs personal strength and strong will helped see his children through the Ohio University, and he worked his way up to become Plant Manager and Production Director of the company. This is how the Soberays came to know the industry and learned how to utilise machines such as horizontal/vertical boring mills, lathes, planer mills, exotic hard facing, etc.
During summers and holidays, Ron Soberay of the second generation would work under his father as a draftsman while earning his engineering degree from the Ohio University. It quickly became evident to Ron that a lot of companies were calling Bolling and asking them for second-hand and rebuilt equipment.
Bolling was so busy building new machines that they were refusing such requests. Ron realised there is a huge potential market for used and rebuilt rubber processing machinery.
As the market matured, the Soberays made a strong move to position themselves as the leading re-builder of rubber processing machinery in North America by establishing Soberay Machine & Equipment Co.
For almost two decades, Soberay was Firestone/Bridgestone‚Äôs sole supplier of rebuilt mixer bodies for all their extended North American plants. They also supplied rebuilt machinery for most major American and global tyre and rubber companies.
When Firestone became the first company to shutter four of their manufacturing plants in North America in the 1970‚Äôs, Soberay purchased their tyre plants.
He studied the local market for the equipment in demand by other indigenous tyre producers. His focussed marketing efforts and reputation for ethical business led Soberay to become the dominant force in the field of second-hand machinery.
The company began purchasing large amounts of equipment from major tyre companies as they restructured and closed plants.
Today, the torch has been passed on to the third generation. Ryan Soberay heads the third generation involved in the tyre and rubber processing machinery industry. Like what his grandfather had done with his father before him, Ryan was introduced early in to the business.
The rubber processing machinery field was challenging for Ryan. Under his father‚Äôs training, he began studying how machines were inspected and which wear parts must be checked for acceptable tolerances. By the time Ryan was 14, he rebuilt his first lab mixer.
He travelled with Ron all over the US and even overseas to places such as China, Europe and Mexico.
Ron recalls an interesting incident when Ryan was 15 years old. He was taken to a meeting of Continental Tire in Hanover, Germany, with several members of the board of directors.
Ron asked the Vice President of Purchasing and a member of their Board of Directors to join the family afterwards for dinner.
The VP said: ‚ÄúAs you can imagine, I‚Äôm often asked out to dinner, but I very seldom accept. However, I must admit that I‚Äôm impressed with Ryan‚Äôs alertness and manners that I will make an exception this time, and I will accept‚ÄĚ. It was a proud moment for Ron.
It once again proved that Soberay & Sons Ltd is in safe hands as Ryan sets to build new markets in a very highly-competitive world market.