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Trailers with a second life

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Bilateral trade between Denmark and Russia has long been established. Danish businesses are represented across almost all sectors in Russia. Most companies have chosen to enter the Russian market via exports or the establishment of subsidiaries. Some Danish companies have even located production facilities in Russia.

In light of recent political developments, the situation has changed significantly, and companies such as Krone ScanBalt are noticing the harsh effect on their business. Krone ScanBalt was founded at the end of 1997 and, as its name indicates, has focused from the start on trade between Scandinavia and the Baltic states.

“At the beginning, our aim was to buy trailers in Scandinavia and sell them in the Baltic states,” explains CEO Jan Knudsen. “In 2001, we started working as a Krone dealer in Lithuania selling new trailers as well. This was the beginning of a very dynamic development in the Baltic region.”

Today, Krone ScanBalt has Krone dealerships in Latvia, Lithuania, Ukraine, Denmark and Estonia. “Last year, we decided to move our second-hand business into its own division with the official name Krone Used. As a used trailer company, we work with partners in several countries,” says Mr. Knudsen. “Due to constant geographical expansion, we own subsidiaries in Denmark, Hungary, Spain, the Benelux states, Germany, several Baltic states, Russia and Kazakhstan. Furthermore, we cooperate with partners in Saudi Arabia and South Africa. Everywhere we sell new Krone trailers, we have 100% subsidiaries.”

Krone ScanBalt has 65 employees, annual turnover of 90 million EUR and has been part of Fahrzeugwerk Bernard Krone GmbH in Werlte, Germany, since 2010.

“Today, we sell over 5,000 trailers a year: 3,500 new trailers and around 2,000 used ones,” states Mr. Knudsen. “We focus mainly on four areas. Besides the distribution of new and used Krone trailers, nine employees are responsible for the services and spare parts division. Here, we are active in markets where we sell new Krone trailers, as well, which means Denmark, the Baltic region and Ukraine. Our fourth division is related to finance. We are able to offer professional financial solutions for products from our range, which is greatly appreciated by our customers.”

Customers also benefit from Krone ScanBalt’s huge product and service range, and many of them enjoy very close relations with the successful trailer company.

“At Krone ScanBalt and Krone Used, we care a lot about customers – regardless of if it is a company with one unit or one with more than 10,000,” sums up Mr. Knudsen. “For us it is crucial that our business creates situations that have a positive effect for our customers. We want to support them as much as we can.”

This customer-oriented vision is the main drive behind all Krone ScanBalt and Krone Used’s activities. Their new and used trailers are quality products from a highly reputed brand. With Fahrzeugwerk Bernard Krone, the Danish trailer experts belong to a leading international, family-owned company run by the fourth generation.

In 2014, the Krone Group generated sales of nearly 1.5 billion EUR with Scandinavia and Eastern Europe as its most important foreign markets. Its main sales generator is the Commercial Trailers division, which turned over around 925 million EUR.

In 2014, the Group manufactured 35,000 trailer units. “Due to the fact that we are part of the Krone Group, we are building all types of standards from tilts to container chassis for container transports,” stresses Mr. Knudsen. “Our two main businesses are tilts and refrigerated trailers.”

Krone trailers have always set new benchmarks in the market. The company is well-known for its future-oriented solutions. “Green logistic solutions have long been a key challenge,” says Mr. Knudsen. “Krone has put a lot of effort into the development of environmentally compatible transportation that protects resources. Some of Krone’s trailers are equipped with solar panels on the entire roof surface to improve the energy balance. Refrigerated trailers appeal with innovative, quality insulation solutions such as vacuum technologies. There are also energy-efficient front-wall units that not only optimize energy consumption levels but are also very quiet.”

Due to these outstanding solutions, Krone ScanBalt has grown consistently. “We have a new investment here in Padborg,” explains Mr. Knudsen. “At the moment, we are expanding our yard. We have 41,000 m² fenced in with all units – new and used trailers, services, spare parts and finance – located right here. We have recently bought another 27,000 m² to expand our parking range.”

Krone ScanBalt has long been a leading player in the market with only one serious competitor. In Denmark it has a market share of 35% in the new trailer division, which makes it the number one in the market.

“We are either the number one or the number two in any market,” underlines Mr. Knudsen. “This has been very stable over the years. If we are the market leader, our competitor is the number two and vice versa. We have been extremely strong in the tilt division, where we are clearly the European market leader. And we have a huge number of customers who are ordering new trailers. Luckily, we can rely on long-lasting customer relations in this business. We are basically doing the same things in the same way our main competitor does. But today, we have a different way to produce our products. Our great advantage is that we have the used trailer business. On the other hand, our competitor has a longer history than we have in reefer trailers. We only started in 2000, but our product is very good, and we are convinced that the business will grow stronger in this area as well.”

To promote its extraordinary products and services efficiently, Krone ScanBalt has competent marketing experts in Denmark covering all countries. So far, social media has not played an important role in terms of marketing, although that could change in the long run.

Instead, Krone ScanBalt organizes Company Days, which are extremely popular in the Baltic states. “These Company Days are a big family event really,” explains Mr. Knudsen. “There are kids’ activities, a bit of a show program, and it all finishes with a decent meal. I really like these events and always attend them. At the moment, our main concern is related to the Russian crisis. From our point of view in Scandinavia, the Baltic states and Ukraine, we are having problems with the embargo. It should be over by July, but it seems to be going on for longer than we would like.”

It has had a major effect on the business. “Last year, we saw a 40% decrease in the new trailers business in the Baltic states and 20% in the Danish market. Denmark is an important exporter, especially of temperature-regulated goods. Unfortunately, the used trailer business is also effected. We are already experienced crisis managers as we had similar situations in 1998 and in 2008. The Russian market always picked up again. But this time it seems to be different. It is more the European Union that is talking to Russia, and it is hard for us to forecast the end of the crisis. This means we will face new challenges in the future. We are becoming more and more professional, but we are under pressure to build the right trailers that do the right thing. Especially in the used trailer business, we have major investments going on. We need to go out to more places on new continents. We need to have under control that trailers can have second life. Africa, the Middle East and Eastern Europe – these are all regions with lots of future potential. We aim to be market leaders in those markets.”

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