HANOVER, Germany—Continental A.G. and nearby Menke Agrar GmbH have entered a distribution partnership to sell drive belts for the agriculture industry aftermarket, bringing two long-standing Hanover-based companies together in a sales network that should benefit farmers and their harvests.
Continental is an automotive parts manufacturer of brake systems, power train, chassis and tire components, among many other parts. Menke Agrar is a subsidiary of Hanover-based Agravis Raiffeisen and a trading company for the agricultural sector, considered one of the top independent providers of replacement parts and accessories for agricultural machinery.
Menke's sales channels mainly are in Germany and central and eastern Europe, and Menke's proximity and customer base served as an attractive justification for the partnership, according to a Continental spokesman.
"With the partnership, we are bundling our many years of product know-how with the sales network of Menke and Agravis," he said. "As an established technology company in the field of drive belts, we complement the strong position of Menke and Agravis as a trading partner in the agricultural sector."
Financial details of the transaction, which closed in late February, were not disclosed.
Continental will manufacture the aftermarket belts—including wrapped V-belts, banded V-belts and variable speed belts, as well as poly-V-belts—mainly in Hanover, and Menke will market them under the name, "Continental Agridur," according to the spokesman. There will be no separate trademark.
"Quality, performance and availability are decisive criteria for being able to take a customer-oriented approach in the agricultural sector," said Michael Grote, head of product management and purchasing at Menke Agrar. "(Continental) assures operators that their highly complex and expensive agricultural machinery will not spontaneously break down during the short harvest season, and that a replacement could be provided quickly in the worst-case scenario.
"We are delighted to have a reliable partner for providing the best possible products and services at our side in Continental."
Menke will look to leverage Continental for its expertise in drive belt production, belts that are known for their long running times and resistance to dirt, dust and extreme temperatures—making agriculture safer and more efficient, the Conti spokesman said.
"The main advantage for the market is the quality of our products," he said. "We largely offer original equipment manufacturer quality for the replacement market—durability and reliability offer decisive advantages for the end user in order to get through the harvest season safely."
Continental will gain access to a previously untapped customer base (up to 9,000 aftermarket specialty and repair shops), industry awareness and an experienced sales support system with Menke.
"We pursue common goals: High quality products with optimal service and advice for the end customer," the spokesman said. "For Continental, Menke's and Agravis' expertise and level of awareness mean an enormous advantage in the replacement market for agricultural machinery.
"In return, Continental offers exclusive sales support measures. This constellation gives both companies an advantage in the market."
The drive belts in the Agridur portfolio will be available to the specialist dealers and repair workshops that Menke Agrar supports in Germany as well as central and eastern Europe.
"We are opening up new options for the market and untapped potential for both companies by combining our partner's sales network with our technological expertise," said Rodrigo Maia, head of the drive system industrial business unit at Continental.
Coronavirus doesn't deter deal
The coronavirus pandemic has not passed the agricultural sector without leaving its mark, according to the Conti spokesman.
However, despite the predicted decline in sales in Europe in 2020 for the agricultural sector, agricultural companies still are signaling a willingness to invest.
"A segment-specific approach must always be taken in this regard," he said. "In Europe, for example, a rather positive trend is perceived for combine harvesters. It must be noted that the willingness to invest is particularly dependent on factors such as the harvest, climate, producer prices and other political and economic factors.
"These decisive factors will therefore define market development at the second half of the year and next year."
Both Menke and Continental remain fully operational at their Hanover locations.