CEAT has expanded radial and bias ag and OTR tire production at its plants in India, he added.
The increase in end-user demand prompted the tire maker to ramp up production capacity that originally was mapped out for three to five years from now, he said.
In the U.S., CEAT has contracted with several importers to help streamline the distribution process, he said, noting that CEAT plans to build distribution centers and mixing warehouses in North America in the future and handle logistics more internally in a couple of years.
"We have to grow a little bit more before we can justify that," he said.
Logistics is a key factor in today's ag tire market, Loethen said, given the much-publicized overseas shipping backlogs at the ports and shortages of shipping containers and trucks to transport them to their final destinations.
Adding to the chaos is a high demand for tires and not enough supply to fill orders quickly.
"The key to this year is the same as it was last year. … It's about logistics right now. Can you get the tires here, at the right price at the right time to move out? That's the key. Whoever's the better logistician in terms of contracts with shipping companies, getting raw materials in, processing the supply chain, getting the tires manufactured and to the end user, is going to win," he said.
"Everybody's quality is very close, there's no bad tire being sold in North America. The farmers simply won't stand for it. You're out of the market fairly quick if you don't perform. Now the key is, can you get the tire here at the right price and at the right time to meet the seasonality of the United States market? So whoever, I feel, is the best at shipping and logistics, is going to see the greatest growth in their portfolio," he said.
Disruptions in the tire supply chain have opened up opportunities for smaller suppliers, such as CEAT, to gain customers, he said, if those smaller competitors have product to fill an order larger suppliers can't.
"If the market is slow and it's full of tires, what are people going to ask for? They're going to ask for Firestone first, because they're familiar with it, then Michelin, because they're familiar with it." But if Firestone and Michelin can't fill an order right away, a customer may turn to second-tier brands they aren't familiar with, he said.
"Now they'll take their chance on (CEAT), and they're seeing how good we really are and it's getting our name out there. Our sales have doubled this last year and our demand has tripled. It's been wonderful," Loethen said.
"We have a good tire. It's allowing us to get in and let people see our tire run, so we're really excited about that. That's been the most helpful part for us is, since we have been able to supply (product), we've had guys who say, 'Hey, I need a tire. OK, I'll try CEAT. Wow, this is really good.' It's given us a chance to get out, market and prove ourselves," Loethen said.
Looking forward, Loethen said he has three goals as president of CEAT Specialty Tire:
- Show dealers that CEAT cares about them. "I see them as a partner. I want them to make money and make money off my tire."
- Help dealers grow their businesses with exclusive territories. "I'm not going to put people on top of each other. Dealers are going to have their own areas. We're not going to sell to everybody in a given area. That's not our plan. Our plan is to go with a certain dealer in a certain region and that's going to be the CEAT dealer because that way they can make money."
- Offer a value product to the family farmer.
"Small farmers can't afford expensive tires but they are missing out on all the technologies, on all the good things that a high-technology tire has. At CEAT we have all those things. We have a VF tire, high technology, flexible sidewalls, low soil compaction. Why should just the big farmers get those? Why can't the family farmer have those? He should be able to be profitable, too. He should be able to have that type of equipment," he said.
"So one of the reasons I came over to CEAT was I can deliver the high-value tire, the high-technology tire at a price that one, my dealer can make money on, they don't have to worry about someone sneaking up behind them and cutting the price; and deliver that high technology at a value price to the end-user so his farm is more profitable.
"He's getting less rolling resistance, better gas mileage, less soil compaction, all those good things that a top-tier tire gives you but not paying a top-tier price."
