Providing value for money always has been important for Balkrishna Industries Ltd. (BKT), and it has become even more vital during these times of inflation and high interest rates. Doug Kershaw, president of BKT USA, discusses the tire makers views on the past six months and the year ahead.
Coming into 2023, customers reported heavy inventory coupled with poor weather conditions.
In regards to the agricultural market, the poor weather conditions have forced a late start to the planting season. Because of these factors, the market has had a slower start than in the last few years. However, now that we are starting to see conditions improve, we expect the market to pick up in the second half of 2023.
In regards to the OTR market, the infrastructure bill is helping parts of the country with road and bridge maintenance.
In the U.S., operating costs have increased significantly over the last year due to inflation, weather, and other economic factors. Inflation is currently around 7% but is expected to slow through the rest of the year.
In the U.S., the war has increased our availability of products.
The war has greatly affected the energy segment in the European Union, depressing the market and causing stagnation. This has increased our availability of products in the U.S.
After a few years of difficult supply chain conditions, the data shows that conditions are improving. Ocean freight has returned to pre-COVID levels; however, inland freight still has its challenges with high labor costs and low availability of equipment.
Pricing and availability of raw materials has improved, so we don't see any major price increases in the near future.
BKT has a strong distributor and dealer network in the agricultural market. In the OTR market, we have some pockets of opportunities with construction and mining. We are currently working with our servicing dealers to fill these pockets and grow our business.
Out West, the weather conditions have stabilized, and we see great opportunity as farming recuperates from the long drought.
With all of the uncertainties regarding the U.S. economy (interest rates and inflation), people are becoming more cautious about what they are spending their money on.
At BKT, we focus on offering value for money spent on our products. We also concentrate on controllable issues like designing tires to meet the ever-changing customer demands.
We continually come out with new sizes and patterns to meet our customers' needs. Generally, we release 70 to 90 new SKUs annually.
EV tires. BKT has developed a line of E-Ready tires with the Agrimax Factor. The reduced lug angle ensures less rolling resistance. The 5% increased contact area significantly reduces the noise level in the cab. Both features lead to a greater comfort level. The tire's braking on wet surfaces is improved. The tires' strong polyester casing provides good lateral stability and a faster steering response when used in high-speed operations and heavy-duty service. This initial offering of E-Ready tires shows BKT's commitment to electric mobility.
Sustainability is an ongoing mission for BKT, and one we aim to be transparent about. Our most compelling initiative has been regarding carbon black.
BKT started producing carbon black in 2019; today, 100% of BKT's requirements are met in-house. Not only does this guarantee the quality of our supply, but also reduces the costs and environmental footprint of imports and transport.
Our carbon black plant is an energy-efficient system built and set for zero loss of resources. BKT has developed in-house technology integrating carbon black manufacturing with both tire production plants and power generation. We have also created a green area and a water body in addition to energy conservation measures.
BKT continues to invest in major advancements and capacities at our tire plants, especially Bhuj. Current investment projects include track production and expanding into larger sizes (57 inch rim diameter) for the super-giant OTR market.
We are seeing more and more off-highway brands entering the tire market in the last year or so due to favorable import conditions.
We consider our distributors and dealers as partners at BKT, and we continually communicate with them regarding strategies for growth. Our partners can feel confident that BKT is a strong brand, has continuous improvement, and will provide the best products and services in the market.
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