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BKT (USA) outlines strategies for growth

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BKT (USA) outlines strategies for growth

BKT (USA) Inc. has a strategy for growth that has helped it increase sales rapidly in North America. The company exceeded its original forecast by over 30% in 2010 and by 25% in 2011. And through the first quarter of this year, it was at 39% of its goal for the whole year. In fact, the company achieved its five-year growth objective of $100 million in sales in North America in just four years.

BKT (USA) is a subsidiary of Balkrishna Industries Ltd., which is based in Mumbai, India. The company is a manufacturer of agricultural, earthmoving, construction, industrial, ATV and lawn and garden tires.

So, what’s the strategy? It’s “been to establish BKT (USA) as a premium brand name with high quality products and provide value,” says Rami Bitran, general manager. He adds that the company is pricing its products lower than the other leading brands in the market.

Another component to BKT (USA)’s success is “we aim to do what we say,” says Bitran. “You must continue to tell the customer what you can and cannot do.

“We keep our ear to the ground and deliver what the market needs.” This means continuing to expand its product mix and line-up quickly. BKT (USA) is 70% agricultural tires and 30% off-the-road, which also includes ATV and other tires that are not specific to the agricultural line. The company is trying to drive its mix to more of a 50/50 mix in the future.

In total, Balkrishna Industries has more than 1,800 SKUs, a number which continues to grow rapidly. It introduced 150 SKUs in 2011, with 71 of those SKUs being specific to the North American market. The company plans to launch another 150 SKUs during 2012.

Since BKT (USA) opened its offices in Akron, Ohio, in 2008, it has consistently outpaced the industry in growth for its products. Bitran likes to view sales in terms of metric tons, and the chart on this page shows how quickly the company has grown.

Like others, it has experienced product shortages. If not for that, BKT (USA) may have had sales of more than $140 million last year. “We started the year overbooked and have slowly been getting on top of the situation,” says Bitran.

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To further help supply, Balkrishna Industries will start seeing production coming out of its new Bhuj, India, factory during the third quarter of 2012. The plant is being built on 300 acres with the first phase utilizing around 30 acres, with the capability of producing 90,000 metric tons of products. Balkrishna Industries is planning to invest around $325 million in the project, according to Bitran.

The plant will produce the full product range of BKT (USA) tires. When completed, Balkrishna Industries will have four tire plants, with a capacity set for 167,000 metric tons at the end of 2012, 224,000 metric tons at the end of 2013, and 280,000 metric tons at the end of 2014.

To further support its supply needs, Balkrishna Industries has a new mold plant in Dombivil, Indian, not far from its Mumbai headquarters. The plant is able to produce 270 molds per year.

BKT (USA)’s new business plan, which the company calls “Top Spot,” is quite ambitious. The company has already achieved the number one market share in bias rear farm tires in the U.S.; its new goal is to achieve the top position in radial rear farm and small farm tires by 2014, too.

Knowing the importance of the OE market, the company has appointed Bill Haney as its sales manager for this segment. “It’s the next big initiative for us,” says Haney. “The OEMs keep working on bigger, larger and higher horsepower units and we must have tires to meet those needs.”

According to Bitran, the company is working with three key distributors in Mexico, and will sell $20 million worth of tires there in 2012, making it the market leader.

The company is looking to increase its North American sales to $110 million for 2012, $165 million for 2013 and $220 million in 2014.

Bitran says that these sales would account for 25% of the parent company’s total sales objectives in 2014. “Our whole group is committed to this vision.”

The company recently moved to new offices in Akron. It has divided its organization into three sales teams to better service its customers as the company continues its growth. In total, the company employs 12 people in its Akron operations.

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