Focus on advanced technology
By Sharad Matade:
BKT, a global powerhouse in OTR tyre market, is focused on building its brand through adopting advanced technology, says Rajiv Poddar, Joint Managing Director
The North Amercian agriculture tyre market is going through a tough period. Yield is falling, so is farmers’ income. At the same, the market is now being captured by Chinese tyres and major tyre companies are also ramping up their OTR production which may lead to oversupply. In this situation, how is BKT expanding its footprint there? Tell us about your US associate dealer programme?
We are emphasising on all three elements: products, promotion and distribution, equally to expand our business in the US. The company is bringing more distributors and associates on board to enhance our penetration in the market. However, I cannot share much on our associate dealer programme as of now. We are also investing in building our brand, and the exclusive tyre sponsorship to the Monster Jam event is a glaring example of it. On products side, we are supplying a better product mix with a wide range to cater to the US market’s actual requirements.
How do you compete with premium brands?
We are narrowing our focus on most advanced technologies such as Increased Flexion (IF) and Very High Flexion (VF), which help to increase farming efficiency through reducing compaction and increasing fuel economy, for some of our agriculture tyres sold globally. Actually, we are not selling a commodity, but an experience and advanced concepts and when you think of the cost of the ownership, we are the best as we are giving the premium quality at lower prices and continuous support from service centres.
The company’s main business comes from the exports, mainly from the North America and Europe. Why have you not sought an organic growth in these markets so far?
We are based in India and shipping to 130 countries. We don’t have any plans to have a manufacturing plant in the western and any other countries as we have just gone through a major expansion plan by setting up the Bhuj plant. The Bhuj plant, built up with a whopping investment of $500 million, has a production capacity of 120,000 tonnes per year with having capabilities of producing a diverse range – from 5-inch lawn tyres to 51-inch giant OTR tyres. The plant is also armed with highly sophisticated an R& D house and testing tracks. The Bhuj R&D department, equipped with physical and mechanical testing, has researchers, engineers, and technicians, working on from designing a new tyre, over developing new compounds, to improving product performance as well as production processes. As of now, we are targeting to meet for full capacity utilisation.
What is the situation of radialisation in OTR segment?
Radialisation will be very high in certain applications. But there will be always a scope for bias tyres in certain applications such as port and underground mining.
Are you seeing any efforts on green tyres in the OTR segment?
Though the drive for radialisation , IV and VF technology can’t be termed as green initiatives but it will automatically lead to minimise energy consumption, save fuel and less impact on soil.
How do you see the growth of agriculture and mining tyres in India?
The Indian market is growing for agriculture tyres as the awareness of agriculture machinery of the farmers is better than what it was ten years back. Coupled with this, easy availability of finance is fuelling demand for tractors and other farm equipment. So we are seeing the agriculture tyre market is growing in India. The new government is looking to take positive steps for the mining sector and we are seeing bigger vehicles being plied in the mining sector which will lead to bigger tyres in India. We have less than one per cent market share in mining tyre segment so there is a huge space for us to grow.
Will you go for an inorganic growth in near future?
We are not particularly targeting at an inorganic growth. But we are open to evaluating if something comes on our way. We are more keen on bringing more technologies and capacity utilisation,
What are the challenges in OTR segment?
The OTR is a highly technical segment. The requirement of service, equipment and maintenance of the equipment is critical and high costs. To tackle this challenge, we have tied up with service providers in the key market.