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Observers believe ContiTech will prosper with Veyance

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AKRON—Some distributors of belts and hose and suppliers of products to belting operations believe ContiTech A.G. will benefit greatly with Veyance Technologies Inc. in the fold.

“It's really a no-brainer,” one said. “And it gives Veyance a parent with a strong financial foundation that's in the business, rather than a company that bought them to sell them.”

Others echoed similar thoughts. “Given the reported sales of the combined industrial North American business, this puts ContiTech at the top, by far, from all others,” said John Shelton, president and CEO of Atlanta-headquartered Belt Power L.L.C., a distributor and fabricator of belts.

It might even total more than all the others combined, he said.

Tom Richardson, president of Burr Ridge, Ill.-based Conveyor Accessories Inc., said the biggest gain ContiTech made, in addition to its instant growth in North America, is Veyance's highly qualified distribution network in the region.

ContiTech gains significant credibility in North America, according to Thomas Pientok, president and CEO of Apache Inc., headquartered in Cedar Rapids, Iowa. “The Veyance name and distribution makes Conti a real force in North America.”

ContiTech has not had a real presence in the region in the past, he said.

Pientok agrees with Richardson that with the acquisition, ContiTech gained access to a well-established North America distribution operation.

ContiTech has told the Veyance distributors they are trusted and this is a good opportunity for them to add value to their businesses, according to Heinz-Gerhard Wente, a member of Continental's executive board and CEO of ContiTech.

“We found a very efficient organization and very efficient marketing approach,” Wente said. “That is the reason why we will not change the sales and distribution structure here in North America.”

In addition, Pientok said, ContiTech benefits from a strong quality product produced by Veyance under the Goodyear Engineered Products brand. The name will change to ContiTech, he said, but “I am certain they have plans established for an effective brand transition.”

Human nature being what it is, Richardson added, it is likely customers still will think of the Veyance belt as the Goodyear brand. “And the mental connection could last for a while,” he said.

Shelton noted that ContiTech's acquisition gives it a firm foothold as the largest industrial rubber products company in the world.

While market size was important, he said, all of the efficiencies the company gained with the possibility of manufacturing rationalization, consolidation and reduction of duplicity can't be discounted, either.