Kal Tire’s African growth in the wake of Covid-19
By Leon Louw, owner and editor of WhyAfrica
After more than two years of lockdowns and economic devastation across the globe, Kal Tire, like other companies around the world, had to find solutions to challenges never encountered before. As supply chains disintegrated once the world re-opened after the Covid hiatus, companies were suddenly faced with significant increases in commodity costs, spiralling freight rates and a substantial scarcity of ocean-going freight space.
These supply chain and logistical bottlenecks could not have come at a worse time. Industries had just started to emerge from a Covid-struck economy when the supply chain disaster struck. Markets were then further challenged by the shock of a war in Eastern Europe early in 2022 and another outbreak of Covid-19 in China, which created even further disruption.
“To mitigate the risks and negotiate the supply chain bottlenecks in the wake of a global pandemic, Kal Tire invested enormous amounts of working capital into additional levels of safety stock to ensure our clients do not run short of tyres and other tyre products,” says John Martin, Southern Africa Vice President at Kal Tire’s Mining Tire Group.
Canadian-headquartered Kal Tire’s presence in Southern Africa is managed through their operations in South Africa, Zambia, Mozambique, and Botswana. These four countries form the service and supply platform to support the company’s in-country customer base, as well as customers in other Southern African countries, including the DRC, Zimbabwe, Tanzania, and eSwatini. In addition, Kal Tire is pursuing new opportunities in Namibia and Lesotho.
The rise of the Northern Cape
Kal Tire has seen its most notable growth in the Northern Cape province of South Africa. The company recently expanded its footprint in the iron ore and manganese fields of the Kalahari and with the construction of a full Off-The-Road (OTR) service centre, is able to include OTR tyre repairs and other related services in their service offerings in the Northern Cape.
The growth in the Northern Cape has been so prolific that it currently necessitates additional, dedicated service and support resources and investment in localised infrastructure. “We have now assigned these dedicated resources to the region, and we continue to assign further service and support competencies as new mining operations continue to open. This remains a key area of growth and the opportunity to serve new customers with Kal Tire’s full service offering and technical capabilities,” says Martin.
Although Martin says that Kal Tire experienced some tough challenges during Covid-19, he adds that the company continues to see growth in all its Southern African countries.
“The significant investment into several large mining operations in Botswana by international mining companies is exciting, as is the recent election of a new president in Zambia. The new Zambian government has created hope of an improved economy through much needed reform and support for the country’s mining industry,” says Martin.
While Kal Tire’s Botswana and Zambian operations performed admirably in recent years, their Mozambican operation delivered levels of growth that outperformed the rest of the Southern Africa market. Kal Tire successfully introduced expanded and elevated levels of service and support, including a state-of-the-art OTR tyre repair facility in Mozambique, and that, adds Martin, has been enthusiastically welcomed by their customers.
This growth comes on the back of a depressed 2020 and 2021 in which most businesses were negatively affected, although the South African mining industry was fortunately given a reprieve to continue to operate during the long periods of business lockdowns. According to Martin, 2020 was probably one of the toughest business years in recent times. “However, it was softened to a degree by the ongoing demand we had from existing mining operations throughout these two years. Our contractual commitments with our customers allowed Kal Tire to continue servicing the mining industry. An industry which ultimately became a significant contributor to the revival of the ravaged South African economy,” says Martin.
The role of tyre management in a circular economy
With a worldwide push towards higher standards of Environmental, Social and Governance (ESG) reporting, mining companies will benefit substantially from investing in activities like tyre management, which forms part of a growing circular economy.
The United Nations’ definition of the circular economy is to reuse, recycle, repair and share. These principles also apply to many of the objectives of ESG to ultimately achieve an improved level of sustainability in the way all businesses should operate.
Kal Tire’s fundamental philosophy is to prolong the life of all tyres under their care and to minimise the wastage generated from under-utilised assets, in the form of tyres. Along with competent, local resources, advanced tyre management tools, such as its proprietary TOMS (Tire Operations Management System), exclusive repair technology and innovations all contribute to improving the sustainability of the mining operations that they service. Mines can then finally witness the ethical and responsible recycling of the end-of-life tyres, returning the waste tyres back into use, via the circular economy.
According to Martin, Kal Tire’s on-site services remains the company’s leading service offering, most often requested by customers. “However, our site service is not a stand-alone product. Its success is inextricably linked to several contributing factors that includes strong logistical and support infrastructure; unrivalled training and competence development systems; and the provision of competent and capable technical teams to assist with any technical issues customers may experience.”
“Furthermore,” Martin adds, “expanded services that include OTR tyre repairs continue to attract more favour as customers realise the benefits of having a complete end-to-end tyre management strategy from Kal Tire. We are introducing elevated levels of services into our surface mining operations in terms of autonomous tire inspections with our new partnership with Pitcrew.ai, which continues to draw significant interest from our global customer base,” he says.
Kal Tire provides mining operations with fully-integrated tyre management services and the related systems required to do so. In other words, Kal Tire’s management systems are integrated with the mine’s operational systems that allows for critical decisions related to tyre management to be made in real time, and in unison with key operational decisions. TOMS is a forward-looking tyre management system that integrates into mine operations systems, as well as interfacing with TPMS type systems, resulting in the generation of work orders to address operational issues that are recorded by these live systems.
Work orders for tyre maintenance can then be assigned to coincide with normal mechanical maintenance schedules, thereby minimising unnecessary downtime associated to tyre maintenance. Keeping mining machines in continuous operation is one of Kal Tire’s primary objectives as a service provider.
The importance of good tyre management
Good tyre management requires a definitive strategy that manages the life of the tyre from its point of manufacture through to the ethical disposal of the tyre through recycling. The investment in tyres on any mine site is always significant, which can very quickly and easily drain vast volumes of working capital in unnecessary inventory, tyre damage and of course the resulting poor tyre life. Many of these risks to profitability can be mitigated by using the kinds of services offered by Kal Tire.
In an effort to support operational and production objectives, mining tyres can be managed through a comprehensive tyre management strategy and programme that offers efficient and effective maintenance support, as well as quick turnaround times of the production vehicles, when undergoing maintenance. However, underfoot conditions in any mining operation remains a key contributor to the success or failure of the budgeted cost of ownership of the tyres. Kal Tire’s technical teams and on-site teams are trained and experienced in conducting site severity studies, identifying opportunities in the operations to reduce the risk of damage and therefore also reduce tyre wear.
According to Martin a good tyre management strategy and maintenance programme can save on unnecessary operational costs. “However, the benefits stretch much further than just cost avoidance,” he says.
“From Kal Tire’s experience, there is additional value over and above the economics of managing tyre life, through maintenance and repair strategies. Additional value in utilising the experience of a competent service provider comes through the mitigation of risk, against increased supply constraints of new tyres, logistical delays at congested ports as well as poor availability of ocean freight. These are all contributing factors and risk-mitigating options that should be considered when operating in very remote geographies,” says Martin.
Leon Louw is the founder and editor of WhyAfrica. He specialises in natural resources and African affairs.
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