BKT USA eyes ‘strategic' growth in OTR tire markets

TUCSON, Ariz. — BKT USA Inc. President Doug Kershaw wants the subsidiary of Indian tire maker Balkrishna Industries Ltd. to become a "one-stop shop" for U.S. OTR tire dealers.

His goal for expanding in the U.S. market involves proving the tires' quality — and strategic growth.

"We want (dealers) to be successful with our product. Without them we can't be successful. Our tagline is 'growing together.' We have to do it together. We can't do it alone.

"Quality is our No. 1 key success factor to us. Because if our product is not performing to what the market needs, then we won't be successful, period," Kershaw told Tire Business during an Feb 23 interview at the TIA Off-the-Road Tire Conference in Tucson.

"It doesn't matter what the price is, it doesn't matter what the logistics is, it's quality," he said. "If you can count on our product, then you'll get good performance, keep your costs in check, your customers happy as a dealer. We're happy. Everybody is good. That's the way we want it. It is our number one key success factor."

Kershaw and Minoo Mehta, senior adviser at BKT USA, both said the biggest challenge for the company this year is supply-chain logistics. While tire demand has been good and last year's supply-chain disruptions have eased, the company still has to stay on top of the logistics of getting overseas supply into the U.S. in time to meet its dealers' orders.

Adding to the logistics challenge is meeting dealers' on-demand needs.

"I think the dealers don't want to stock as much. They're watching their cash flow. So they're really relying on the manufacturers and vendors to stock the product and get it to them when they need it. That's really the big trend I'm seeing — they're really keeping their inventories at their dealership locations down," Kershaw said.

"We want to be a one-stop shop for the dealer, and that means that we have to carry all sorts of patterns and all sorts of sizes — and in stock," Mehta said, adding, "If we run out of tires in our warehouse, we have to wait 90 days to replenish it. So that cycle, that planning of the flow of the products into the warehouse and to the customer, is the biggest challenge for us. Because we have the products, it's just getting them in, in time for the need at the right time and right place."

Kershaw added that the company's logistics managers meet weekly to evaluate the status of inventory at the firm's two U.S. warehouses and shipment schedules.

"It's a constant process," he said, adding that he expects OTR tire sales to pick up soon with the start of spring construction projects.

He said the 25-inch Earthmax SR30 loader tire is BKT's biggest seller followed by scraper tires for construction.

BKT, which sells tires for construction and farm, has been delving deeper into the North American mining market with plans to introduce 57- and 63-inch rim-diameter tires soon.

Despite the competition in all three markets, Kershaw is confident BKT can expand its footprint.

"You have to prove yourself with the cost-per-hour and the performance. If you're not well-known and you're not in with a particular group of people, it can be challenging to get in.

"But once they try it and see the value of the BKT product — our biggest advertisement is the tire itself. If it performs and the customer has seen the value in what they're getting and the sales and service they get from us, then they're happy and they want to stick with our product. That's how we're growing," he said.

He said part of BKT's expansion in the North American OTR tire market will be adding more dealers, strategically.

"Strategic is the key word because we're not going to sign everybody and their brother. We want strategic partners. We have some good ones right now," he said.

When looking to add more dealers, Kershaw said the company looks at regional coverage for end-users.

"I would say that in some areas we're fairly decently strong. In other areas, we have lots of room to grow. With all the dealerships buying each other up right now, it can be a little challenging. But our team is really good and they are meeting with the proper people and making strategic decisions. I think we're going in the right path."

As the company aims to grow its market share, Mehta stressed: "We're not going to compromise on our quality. We have to give the best quality at the best possible price the market can bear. And we are very strategic in how we distribute. We don't want to be named as third tier. We're upper tier two right now and soon to be tier one in some segments."

Kershaw added: "And that's because of the quality. We just have to prove ourselves in the marketplace. And it's happening."

He said BKT distributes more than 3,200 SKUs.

"We come out with anywhere between 70 and 90-plus SKUs per year, depending on the demand and the newer applications.

"That's something we pride ourselves on, is the fact that we can react quickly to the marketplace demand and needs. And we will develop the proper tire for the proper application in a very timely manner. And that's why our SKU list continues to grow."