OTR Tyres Ltd

Bob Wallis, president of the Kal Tire Mining Group, also gave his thoughts on the move.

Why have Kal Tire invested in OTR?

Over the past decade, we've witnessed the consolidation and transformation of regional mining companies into incredibly large global entities. At the same time as the mining companies have spread their operations around the world, they have demanded more from their suppliers. The demands placed upon us as tyre and tyre service providers are no different - more in safe work procedures, more in mine site processes and procedures that will further tyre life and more in repair and retread technologies. Kal Tire's vision is to offer global mining companies best in class products and services at all of their mine sites around the world.

Why OTR in particular?

There are a number of obvious business reasons such as we operate in complementary markets rather than overlap, we have both developed similar standardised operating procedures and we both have a passion for providing the customer with the best service possible. But, the most important reason to me will be less obvious to OTR and Kal Tire employees until we have more time and opportunities to interact with each other. Kal Tire is a values based organisation. Our sense of OTR is that their values, goals and how customers and team members are valued and treated very much in common with our own. I'd encourage all OTR team members to read and understand our Aims. Kal Tire Aims will tell you what is important to us and they guide our conduct in every situation. It is the belief that OTR shares our passion for earning customer trust and for providing best careers to its team members that drew us to OTR in particular.

What changes can OTR team members expect?

Canada is a vast country with few people so, by necessity, we are used to operating in a very decentralised manner. As we establish a global footprint for our Mining Tire Group, our vision is to: have a number of entities that operate independently while sharing best safety and operations practices, coordinate warehousing and distribution of products so we can efficiently move tyres to meet customer requirements, focus our sales and marketing efforts with one common brand worldwide and effectively use our size and capabilities to develop long term relationships with suppliers. For most people within OTR there will be little change. We do not intend to move one single person into OTR. Chris Skelton will continue to be a significant shareholder and he will be responsible for all operating decisions in the future as he has been in the past. We intend to expand OTR's business and for all OTR team members there is the opportunity to participate in this growth.

For some people, there will be opportunity to participate on committees with Kal Tire team members from various parts of the world to share best practices and help determine our future safety and operating standards. For others, there will be the opportunity to apply for positions within Kal Tire in places such as Canada, Mexico, Chile and various other countries.

What else does Kal Tire bring to OTR?

Kal Tire brings a long term commitment to being in the tyre service business. With the addition of OTR, Kal Tire will have almost 4,000 team members operating in 14 countries. None of our competitors can match our level of expertise, our geographic reach or our financial capability. Like OTR, we are a private company. Kal Tire is a partnership founded by Tom Foord whose family remains our majority partner. The Foord family is committed to remaining in the tyre business and growing our company. Last year our sales exceeded CAD$1 billion, we're consistently profitable and we have little debt. Our acquisitions are financed through cash flow from operations. I hope OTR team members get comfort from our financial strength and long term commitment to the business. OTR wasn't purchased by investment bankers looking to resell the company; we're tyre people and our company will be in this business long after all of us have retired.



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