BKT USA attributes success to teamwork

COPLEY, Ohio — For BKT USA Inc., the U.S. sales arm of India's Balkrishna Industries Ltd. (BKT), teamwork is paramount.

Doug Kershaw, vice president of BKT USA, was tapped late last year to succeed Minoo Mehta as president when Mehta retires this year.

So for the past six months the two have worked closely — talking first thing every morning, either virtually or face-to-face at BKT USA's Copley offices — to ensure that the transition is smooth and the organization is running seamlessly.

"I can't say enough about our working relationship. Honestly, it's the best one I've ever been part of," Kershaw told Tire Business during a recent interview at the company's offices.

Kershaw is expected to get a new title later this summer, part of a reorganization of BKT USA's executive team that includes the creation of two vice-president roles.

The strong relationship between Mehta and Kershaw ties into BKT USA's five-point value system that emphasizes integrity, commitment, entrepreneurship, teamwork and always striving for more excellence, Kershaw said.

"In other words, don't ever be satisfied with what you've achieved. Yes, celebrate it. There's no problem with celebrating, but … we should always look and say, 'Well, how could we do that better?'"

"We're strong," Kershaw said about BKT USA's year so far.

While BKT USA isn't immune to the challenges facing the industry, 2022 is tracking stronger than last year, which itself was a record-breaking year for the company, he said.

BKT reported double-digit growth in fiscal 2021 — pre-tax operating income grew 20.6% to $287.6 million on 46.6% higher revenue of $1.15 billion — and the company grew its revenue in the Americas 66% to $199 million, BKT said in May.

The supply chain remains a top issue.

"But we've had some customers tell us that we're doing much better than our competition in some cases with shipping and helping them stay afloat in the ag market. So that's a very positive thing," Kershaw said.

It's a situation Kershaw doesn't expect to see improve anytime soon with rising fuel costs and ports still backed up.

"It's a difficult environment to do business in right now," Mehta said, noting rising duty costs and the rising cost of logistics.

"The saddest part is that it's the end-consumer who is paying. … It's the end-consumer who has to take the hit, no matter how you look at it," he added.

Operating costs for farmers have gone "through the roof," which is leading to a "slight slowdown" in the ag market, Kershaw said.

Demand in the ag market is still "very, very high," he said.

Supply-chain issues are still making life difficult for end-users.

"If you can't get a tire or another part to run your machine properly, that's going to cost you money, whether you pay a high price for a product or not," Kershaw said.

The farm sector's conversion to radial also is happening quickly in the U.S. There aren't many players in the radial ag market, and those in that space are finding it difficult to bring the product here at the right cost, Mehta said.

The coal-mining industry in the U.S. has remained steady. The housing market has seen some growth but that could slow down, Mehta said.

In March, BKT announced it had produced its first radial ag tires at its 7-year-old plant in Bhuj, India, and it's planning to increase annual manufacturing capacity at that plant to 50,000 metric tons this year.

That growth was part of a $257 million investment package to increase capacity at plants in India, both at Bhuj and a new factory being built in Waluj.

That expansion has slowed as BKT has struggled to get the necessary equipment, Mehta said.

Plans for a U.S. plant — announced in 2018 and suspended in 2019 — remain on hold for the foreseeable future.

One of BKT's biggest sustainability wins is its backward integration of carbon-black residue to power the plant. Instead of relying on the coal-based power plant to operate the site, BKT is using the residue to power the plant, Mehta said, noting that because of that, the plant is incredibly clean.

The quality of the carbon black produced at the plant is far superior than carbon black sourced elsewhere, Mehta said.

The plant also uses a lot of greenery.

"It's amazing what they've done in the middle of the desert. It really is," Kershaw added.

Customers aren't as brand loyal as they used to be and are turning to BKT for discussions about new projects, Kershaw said.

BKT in recent years also has worked to increase its brand awareness. That's been boosted by its sponsorship of the Monster Jam series of monster truck competitions, a deal that extends to at least 2026.

People now know what BKT is, something that wasn't true before, he said. "Even little kids. They know we make the Monster Jam tires."

The growing demand for BKT tires is boosted by the high quality of the product, he said.

BKT also is expanding its U.S. office, which now has 26 employees, by rearranging its Copley space to allow for more offices and more staff.

BKT also has grown its associate and dealer program, expanding to new states, including Colorado, Idaho, North and South Dakota, Utah and Wyoming.

Customers have realized that BKT isn't another "third tier import" company, but one that is "U.S. based, hiring a USA based team. We're committed and support our markets and we're supplying good products. People can count on us for that excellent quality," Kershaw said.