CEAT to boost capacity for booming ag tire market

With consistent food supplies a concern globally, the agriculture market has shown steady growth. Because of that demand, Amit Tolani, chief executive of CEAT Specialty Tire Inc., told Tire Business that his company is looking to increase capacity by 75% during the course of this year.

The OTR/ag tire manufacturer said it is also looking to increase its portfolio to serve both original equipment and aftermarket customers.

How would you describe business thus far in 2022?

2022 has been a year of uncertainties due to the geo-political developments. We have been expanding our presence in many geographies to service our customers. Last year, we developed partnerships with John Deere, CNH and AGCO — some of the largest agricultural equipment manufacturers. We continue to invest in capacity enhancement and expand our current portfolio of products offered.

How has the pandemic changed the way you do business?

The pandemic has changed the way we reach out to customers. With pre-pandemic, our communication to consumers, as well as our channel partners, was completely offline. The pandemic pushed us to bring in digital-first thinking.

It was important to understand the consumers' journey and how can we provide the consumer an uninterrupted and superlative experience at each touch point, be it pre-purchase, purchase or post purchase. We have leveraged our digital capabilities and initiatives to ensure that disruptions or the need for physical interventions are minimized.

However, as the pandemic-led restrictions have eased, it's important to physically interact with our customers and consumers (in our case, farmers) to gain insights and keep improving the basis of these insights.

How have logistics changed amid supply-chain disruptions?

The recent global logistics crisis was challenging. While our production teams worked hard to ensure lead times were optimized, our supply-chain teams changed their planning process to ensure they plan a month ahead and work along with our channel partners; also keep them informed so that all stakeholders are aligned.

How would you characterize the ag market?

As seen through the last year, one thing that's needed by all is consistent food supplies. We as a company are very bullish on the ag segment — the growth we have seen in the past year is a good testament to the potential of this market.

All segments of the ag market have experienced strong growth, including the aftermarket. While farm income continues to rise on the back of increased prices for goods, on one hand, farmers want to upgrade their aging equipment, so further OE growth is expected. We also expect the aftermarket demand to increase given the increase in farm equipment.

Why did CEAT become a major sponsor of rodeo events?

We decided to associate with rodeo events as it has deep roots in America's agriculture and ranching history. The sponsorships make us relevant to this target group.

CEAT sponsors rodeo events across the U.S. to build awareness of CEAT as the ag tire choice for farms and ranches of all sizes. We are the "official ag tire sponsor and exclusive category event and broadcast partner" of the World Champions Rodeo Alliance (WCRA), World Women's Rodeo Championship (WRWC) and the National High School Rodeo Association (NHSRA). We already see a lot of curiosity and excitement among farmers and ranchers who attend the rodeo events.

What are you telling dealers who are unable to get certain tires?

We have been working on expanding our portfolio to service a wide variety of farming needs. We have several new products releasing every month and can now service more than 90% of the ag tire needs.

On the supply side, we continue to invest in capacity expansion so that we can service larger demands. As explained earlier, we believe in working with the end-consumer to gain faster insights and feedback to prioritize our initiatives.

What trends are you seeing?

With the growing demands of load- carrying capacity and precision, we are seeing increased adoption of IF/VF tires in the market. Last year, we launched our IF/VF range for high-power tractors, Torquemax, and for self-propelled sprayers, Spraymax. We continue to proliferate the range through the addition of more sizes this year.

Do you expect to roll out any additional products in 2022?

We launched our 800 series tires last quarter, which serves the high-power tractor and combine segments. We will also add new sizes to our Torquemax IF/VF range.

Our steel-belted flotation tire portfolio will be augmented with the addition of 26.5- and 30.5-inch (rim diameter) sizes. We have introduced a new block pattern to cater to telehandlers/compact handlers being used on hard surfaces.

How are you addressing sustainability?

At CEAT we have set ourselves a sustainability goal of reducing our carbon footprint by 50% by 2030. Our manufacturing units use renewable energy and our efforts to source raw materials sustainably have led to an increase of 17% in renewable sources over two years.

How do you explain recent price increases across the industry?

The recent price increases were a result of increases in raw material prices and availability, the global shipment crisis and supply chain disruptions.

The next wave of increases is expected to be driven by the inflationary environment. This is expected to continue through the rest of the year.

Do you expect any other major investments in the next six months?

We are in an expansion mode and are adding capacity every quarter. We are looking at increasing our overall capacity by 75% during the course of this year. We are also investing in strengthening our local presence across different geographies by increasing the size of our field force.