Kal Tire Australia has started 2021 under a new managing director, former general manager Miles Rigney. Salomae Haselgrove speaks with Rigney about 2020’s supply chain trends and how he anticipates they will shape the tyre sector in the year ahead.
After more than 25 years in the tyre services business, Rigney has vast experience across the tyre sector, from his early days as a trainee in the Northern Territory and Western Australia, to now leading the company’s Australian operations.
Rigney’s experience also spans international markets including 13 years in Indonesia, supporting other projects in South East Asia and spending time with international vice presidents from Kal Tire’s Southern Africa and Latin American businesses.
After securing three service contracts with new and existing mining companies and welcoming the highest number of trainees to the company in 2020, Rigney takes over as managing director with Kal Tire in a strong position.
He is excited about the new role and will keep driving the business forward in 2021 and beyond.
“We want to expand our service business further in partnership with mining companies,” Rigney tells Australian Mining.
“Kal Tire looks forward to doing more work in the innovation centre in Canada and working on a number of projects; we see 2021 as another year to strengthen further, building on the work done in 2020.”
During 2020, Kal Tire took a unique position in how it reacted to the enquiries of mining companies that were looking to source tyres in response to the COVID-19 pandemic.
While the supply of tyres remained consistent and stable during 2020, mining companies were still quick to take proactive action in case of disruptions to shipping from international manufacturers.
“Once mining companies got to a point during April and May where there was some uncertainty about the impact of COVID-19, we saw an interesting change in their behaviour and actions,” Rigney explains.
“The first thing Kal Tire observed was that available inventory on the ground was taken up pretty quickly as part of the mining operations’ COVID risk strategies.”
Even after mining companies stocked up in the early COVID-19 days, Kal Tire’s second observation was that some mining companies started looking beyond their traditional preferred brands to trial other options.
“This took a little while to understand but from what we saw, the thought process for many miners was to see what was out there and consider increasing the number of available manufacturers as a mitigation to any further potential risk,” Rigney says.
“This led to a lot of customers coming to Kal Tire and asking what else we have or what else is out there, which started conversations around the potential of supplying other tyre products our customers are not as familiar with.”
With many of Kal Tire’s customers trying an unfamiliar product, some were concerned about how these alternatives would perform compared with what they previously used.
In response to their concerns, Kal Tire offered an evaluation transition period for companies trialling new tyre brands, invoicing the mine at a cost per hour rate instead of a traditional sale transaction, dependent on the hours achieved by the new tyre each month.
Rigney says this move proved Kal Tire’s commitment to supporting its customers and its confidence in these products.
“Some customers said while it was appealing to trial a new brand, they were concerned of the risk of it costing more in the long run,” Rigney explains.
“Our alternative, due to our confidence in our products provided for this evaluation period, was to provide the tyres on a fixed cost per hour basis. This meant that the customers could not be worse off financially as they only paid for the actual performance received.
“Ultimately, that strategy proved to be successful. Some of the customers that took that approach have gone through the lifecycle of those products and are looking to allocate some of their future market share to these new brands now the evaluation phase is over.”
Rigney first saw the method of charging for tyres on a cost per kilometre or cost per hour basis being used when he toured Kal Tire’s Latin American operations in early 2020, describing it as an example of the company striving to meet market conditions where appropriate.
Unfortunately, the onset of COVID-19 during Rigney’s visit meant he missed the opportunity to tour Kal Tire’s tyre recycling plant in Chile while in construction.
The plant was constructed after the Chilean Government mandated the recycling of off-the-road tyres, and despite some delays due to COVID-19, Kal Tire has recently started processing tyres.
The legislation for recycling tyres will officially begin in January 2023, which means mining companies in Chile have begun looking for solutions, which Kal Tire has provided with the plant, now in its final testing phases.
Although Australia has not yet passed any legislation regarding the recycling of tyres, Rigney believes this could be a potential opportunity in the future as mining companies look to lessen their carbon footprint.
Despite the complications of 2020, Kal Tire and the wider tyre sector have continued to thrive, with healthier competition between manufacturers thanks to mining companies broadening their horizons and trying new brands.
“The communication lines between the tyre user, distributor and manufacturer have never been more efficient and flowing as they are now,” Rigney continues.
“Seeing customers spread further than their usual one or two manufacturers brings a healthy competition to the marketplace and ensures competitiveness, so manufacturers strive to create better products to grow and protect market share.
“This means tyres ultimately last longer, (reducing) the number of tyres we need to produce, and that can only be a good thing.”
This article also appears in the March issue of Australian Mining.