Casalbore's challenge: Make BKT brand a "household name'

FAIRLAWN, Ohio—Shrinking from a challenge doesn't seem to be in Carl Casalbore's DNA. The 30-plus year tire industry veteran, who has had stints in companies such as Pirelli North America Inc., Cooper Tire & Rubber Co., Continental Tire the Americas and Zafco Inc., recently took the job as president of BKT USA Inc. Why? Because, he said, he likes the challenge. With a corporate goal of boosting off-road tire sales in the somewhat stagnant U.S. market, he has some big challenges ahead. But Mr. Casalbore said most of the hard work has been done—establishing the BKT brand, owned by India's Balkrishna Industries Ltd., in the U.S. "This company grew substantially, and they grew for the most part a brand that was really not known to most people, at least in this country. Now the focus here is definitely to build a brand, exploit the brand. "Our quality that I see with raw numbers is absolutely phenomenal. The adjustment rate is so low that I'm surprised, being in this industry and knowing all the adjustment rates across the spectrum. It's very, very low," he told Tire Business during an interview in BKT's Fairlawn office. "Now the base of the brand is the quality and the range. When you have the quality, which is the base of any product, you build it upon the quality and then you build it on the range, and then it's just a matter of making the right moves at the right time." Mr. Casalbore said during the past few weeks he visited 90 percent of BKT's U.S. distribution customers to hear what they had to say about the BKT product. He said he was surprised that they all stressed the product's quality and performance. "So the hard work has been done, which is the product quality and the range.... We're continuously improving our product. "...Now we need to exploit the brand and make the brand a household name," he said. He said he is pursuing a three-step strategy to expand the brand's sales: Expand distribution points. "We're looking to open up more distribution but to complement the existing distribution that we have," he said. "We're not looking to put people on top of people. We need to give our customers room to grow. So we're going to open up distribution where we have no distribution." BKT has several hundred dealership customers, including TBC Corp., but has no plans to open its own distribution centers, preferring instead to use large dealerships as its distribution centers, he said. Expand the range of off-road tires. Mr. Casalbore said BKT USA wants to be a "one-stop shop" for a full complement of off-road tires, ranging from lawn-and-garden to giant construction/mining tires. He said the company is filling in gaps in its offerings by beginning to offer solid tires and developing giant 49-inch rim diameter tires. About 80 percent of BKT's business in the U.S. is in the farm market, but that percent is expected to be offset with its expansion into the OTR/industrial segment, he said. The ratio of farm tire sales will be decreasing, he said, but the volume is increasing as the company brings more product stateside Despite a rather flat tire market, BKT has been growing its business more than 4 percent every year, he said, mainly by taking business away from competitors. However, the company has no plans to expand into passenger, light or medium truck tires, he said. "Our focus is clearly off-road tires." Develop OE accounts. Balkrishna has OE accounts around the world—except in the U.S., he said, partly because the tire maker couldn't supply enough tires fast enough for the U.S. demand. That's about to change, he said, as a larger tire factory in India ramps up production. As BKT's fourth tire plant, the facility is expected to boost the company's overall capacity 75 percent. This is on top of the three existing plants increasing their capacity 10 percent, he said. The extra capacity "will open the door to OE for us because OE is a fairly demanding channel and one thing is you need supply, you need a dealer network, you need quality and you need a range. We believe now that we have all of that, the focus, obviously, is to expand our footprint in the U.S. with OE," Mr. Casalbore said. He has assigned one of his staff to focus on OE and by exploiting the OE relationships, BKT already has established elsewhere in the world, including with Deere & Co. in Mexico and Germany. Mr. Casalbore said he believes the company has "one foot in the door" to establishing an OE account in the U.S. BKT worldwide sales total about $700 million, with the U.S. division expected to tally $125 million to $130 million this year, he said. By 2018, the company wants to attain $2 billion in sales worldwide. By increasing capacity and selling everything BKT makes, "we believe that's obtainable. OE is a key ingredient here," Mr. Casalbore said, adding the company expects to grow every year by double digits. "But we want to grow cleverly. We don't want to grow for the short term and then recede back. We want good solid growth. We're going to be selective on who we approach. We're not looking to put people on top of each other and that's a very delicate situation. But right now we think we could open up several dealers (accounts) and still not interfere with the existing business," he said. "We're now pushing in a big way radial OTR tires. There are many segments that are untapped. Even though we have good distribution in the States in farm, that doesn't mean that we have good distribution in the ATV/lawn and garden. We don't. So when you look at each of these segments in a separate light, there is tremendous growth to be had because each of them is very different in their flavor. "ATV—we do minimal business but we're now breaking it out, segment by segment, and looking for people that specialize in that specific market and going with it. "We're looking at each segment separately and seeing how we could grow each and exploit each segment to the fullest," he said. To reach this reporter: kmccarron@ crain.com; 330-865-6127.