Orica-GreenEdge – What is in this relationship?

Gerry Ryan, the patriarch of GreenEDGE Cycling, was quick to tell the world that GreenEDGE had generated around $5million worth of exposure in January alone.  Since then GreenEDGE had secured important wins in France, Italy and Spain.  There were strong financial reasons for a company to get on-board, especially with the growing status of cycling in Australia.  But, with three monuments already raced there was still no sponsor.  

That was until last week when GreenEDGE publically announced that it had finally secured a long-term financial backer.  

Social media went into a spin and speculation grew as to who would be the main sponsor.  Was it an Australian company? A global company? Qantas, BHP and Westpac were the first names mentioned.  By Monday morning, these names were replaced by Huawei and Samsung. 

 

But in a masterful stroke of public relations work by the GreenEDGE media team, there were no leaks and by Tuesday morning most of Australia anticipated the announcement of the naming rights sponsor.

By 10.35am, the social media world went into override with the announcement.  It naming rights sponsor for GreenEDGE was Orica.  GreenEDGE secured a three-year co-naming sponsorship with leading global mining services company Orica Limited.

The GreenEDGE webpage crashed as many Australians wanted to read about the new naming rights sponsor. 

Ian Smith, Managing Director and CEO of Orica said ‘this is a rare and fantastic opportunity to secure the founding co-naming sponsorship with this ground-breaking sporting venture. GreenEDGE is the first Australian team at this level and it offers Orica a powerful sports marketing platform, perfectly aligned with our values and drivers’. 

Smith went onto say that ‘sponsorship forms one of the strategic platforms for Orica to increase its brand presence in key global markets and we're convinced that the world-class performances of this team will help provide ongoing global exposure’.

To promote the brand internationally, this jersey will be seen on the backs of some of the best cyclists in the world. 

I was not the only one that was surprised by this announcement.  

Sport sponsorship is about promoting your band. It creates impulses for sales and brand recognition. This helps to explain by Radioshack, Nissan, flooring, gambling and furniture companies have sponsored cycling teams.  The common features of many of these companies are manufacture or sell products for consumers - the man on the street.  

So Cadel Evans when won the 2011 Tour de France, you would expect BMC bikes sales to spike.  That is the power of marketing and brand recognition. 

So when Orica GreenEDGE wins stage of the Giro d’Italia, that commences this week, what do we buy? Good question!!!  

Orica is the largest mining explosive company in the world.  It manufactures chemicals and chemical-based consumables. Most of the exposure is to the mining industry. Not exactly something that you get down the local shop!!!  How often do we think about heading down to the shops to buy some ammonium nitrate to blow up the garden bed for the next crop of tomatoes? 

So what is really in it for Orica?  

Naming rights sponsorships do not come cheap, even in cycling.  While the financial details have not been released, I would have expected that Orica is paying in the vicinity of $3-5 million per year. They would not be paying this amount without the expectation that the relationship would drive sales.  

Cycling is the new golf.  Many of businessmen in Australia are trading in the golf clubs for top of the range carbon fibre bikes.  

While most of residents in the world cannot buy Orica products, I assume that Orica will use its new found cycling relationship to sell its business products to Asian and Latin American markets. I am sure Orica will wine and dine its guests at the top of Alpe d’Huez or on the Champs-Élysées to sell more of its products. 

 

Newcastle (NSW) residents may not slapping themselves on their backs with the news.  They are still angry at the problems at Orica's Newcastle chemical plant, which has reportedly led to health problems for some residents. Orica pleaded guilty to breaching its Environmental Protection Licence recently in the NSW Land and Environment Court when it failed to operate the ammonia plant in a proper and efficient manner.  Not exactly Green, is it?

It is a strange relationship between GreenEDGE and Orica.  But one that guarantees the future for GreenEDGE.  That has to be good for cycling in Australia