Business story

The Volvo Flexi-Gold Contract keeps Michael Vermaak's trucks running

2019-10-17 | 5 min read | 5 min read

Text: Linda Thomsen Högfeldt Photo: Patrik Olsson

For South African farmer Michael Vermaak, success is all about uptime. Having his own fleet of Volvo FH trucks with the Flexi-Gold Contract helps him secure profitability – and stay ahead of his competitors.

"I look at three things when I buy a truck: service, fuel consumption and second-hand value. But service is most important to me,” Michael Vermaak says as he walks towards the big silos where his maize is stored.

It’s early morning and the sun is just rising behind the mountains that mark the boundary of the fourth-generation farmer’s 2,000-hectare vast land. One by one, his seven trucks are being loaded with produce to deliver to customers all over the Eastern Cape. Large clouds of dust fill the air as the trucks depart on the winding gravel roads leading out of the farm.

It’s dry season in South Africa, and the Eastern Cape has been hit by severe drought. For a farmer like Michael, this could be devastating as his business operates in time windows during which irrigation, harvesting, packing and delivery must take place. But Michael has solved the intense South African climate challenge by installing two water turbines and a large reservoir to store water from the nearby Fish River canal, making his farm completely off-grid and self-sustaining in terms of energy supply.

Trust is something you earn. The sale is just the initial part. You need to be there for your customer all the time.

Koos Van Rooyen, Volvo Sales Manager

During periods of drought, his lands are fed from the reservoir and he can therefore avoid loss of quality of yields. The very same eagerness to become more efficient was also behind his decision to start transporting his own products some 17 years ago.

“A big advantage in having our own trucks is that we can secure on-time deliveries. Providing better service for our customers also means we get better prices for our products,” Michael says and adds: “As we’re crop farmers our work is very seasonal. In the summer, we harvest up to 600 tonnes of wheat a day during a small window of six to eight days. Any downtime during that period could mean we lose millions of rand.”

Securing uptime is top priority and Michael is happy with his long-term collaboration with Volvo Trucks and Sales Manager Koos Van Rooyen. The two have worked together since 2004 when Michael heard about Koos via word of mouth.

Michael explains that Koos is different from most salesmen he’s met as he’s always there to help, from start to finish. “Whenever there’s a problem, he sorts it out for us. We’re getting excellent service and that’s why we stick with him and Volvo,” Michael says.

For Koos Van Rooyen, honesty – and always going the extra mile – are the very foundations of a successful cooperation. “Trust is something you earn. The sale is just the initial part. You need to be there for your customer all the time, offering full support on an everyday basis,” he says.

Koos explains that the seasonal nature of Michael’s business is typical for South African transporters and has led Volvo Trucks to develop a new service contract called
Flexi-Gold. With the new contract, the scheduled services and contract fees follow the driving pattern, making sure both service and payments are aligned with each customer’s cash flow.

“The Flexi-Gold contract makes a big difference to my transport business. The operations have become easier and it takes a lot of responsibility off my shoulders. There’s also a cashflow benefit for us – when we drive less, we also pay less. And Volvo takes care of all the scheduling and maintenance of the trucks so I can focus on developing my business and staying ahead of new technology,” Michael says.

Even though he has already reached his childhood dream of having 2,000 hectares of farmland, he is still making plans to expand. Over the next few years, he will install another two turbines in order to set up more dairies and go from milking 1,500 cows to 5,000. But back in 1992, when he took over the land his father bought just a few months before he passed away and started to grow potatoes on 10 hectares of soil, many people thought he would fail.

The Flexi-Gold contract makes a big difference to my transport business. The operations have become easier and it takes a lot of responsibility off my shoulders.

Michael Vermaak, Owner

“They were convinced that growing potatoes was a bad idea and told me I would go bankrupt within a year. Instead, it turned out to be my lucky break. I guess to some extent, I wanted to prove myself and to prove them wrong. Perhaps that’s what I still keep doing,” he says.

He adds: “I love farming. I’m always saying I don’t have a job but a hobby, so I never feel the need to go away on holidays. And I’m very proud of my loyal workforce. They are a big part of my success.”

Michael is optimistic about the future of his farm. In the long run he hopes that security will improve in South Africa, that the racial issue will get better and that his kids will start to farm with him.

But he also admits there are challenges, and that the biggest one at the moment is the roads. Not just in terms of bad road quality, but also due to recent threats against truck drivers. “It has started to get more dangerous lately,” he says.

A few hours’ drive from the farm, Michael’s Fleet Manager Nardus Rademeyer is on his way to make a delivery. It’s a bumpy ride, as the truck is mostly driving on smaller gravel roads of varying quality. The dust is everywhere, even inside the truck.

“Every time Volvo service one of our trucks, they need to put in new air filters,” Nardus says, pointing to the dry landscape just as a small monkey jumps into his field of vision. It is a common sight in South Africa, despite the fences that separate most of the roads from the surrounding nature.

He explains that for many reasons, every day is a challenge when driving on these roads, and that he has to have his eyes wide open. He also needs to adapt to the road quality to save fuel while still making sure he delivers on time.

“I am thankful that we drive Volvo FH trucks. Not just because it’s a friendly truck to drive, but also because of the service. I know the Volvo people will never let us down, and that if I have a breakdown out here, they’ll help me straight away.”

Michael Vermaak Boerdery
Established in: 1992.
Owner: Michael Vermaak.
Number of employees: 200 (including 7 drivers).
Load: Maize, potatoes, wheat, lucerne, dairy.
Number of trucks: 7 (of which all are Volvo FH 440 6x4).
History: Founded as a small-scale potato farm in 1992, Michael Vermaak Boerdery expanded by buying up adjacent land. Today it consists of 2,000 hectares and is one of the biggest farms in the Eastern Cape.
Services: Production and delivery of farm products including potatoes, maize, wheat and dairy to customers in the Eastern and Western Cape.

Volvo Flexi-Gold Contract
With the Volvo Flexi-Gold Contract, the scheduled services and contract fees follow the driving pattern, making sure both service and payments are aligned with the cash flow.