Alliance Tire Group (ATG) has joined KKR’s Green Portfolio Program (GPP), an operational improvement program that uses an environmental lens to assess critical business activities of KKR’s participating private equity portfolio companies.
ATG is a global tire maker that specialises in producing off-highway tires and caters primarily to the agricultural, forestry and construction industries.
ATG’s entrance into the GPP enhances its existing sustainability efforts which have been an area of focus since ATG’s inception. These initiatives center on reducing energy consumption, minimising scrap waste and environmental impact at its tire manufacturing facilities in India and Israel. The factories in India have been built to high environmental standards, with zero liquid discharge and rainwater harvesting. ATG’s facilities in India and Israel have already received or are in the process of obtaining ISO 140001 environmental management systems certifications.
Since August 2013, ATG’s management worked with KKR and members of KKR Capstone, an independent team of operational executives who work exclusively with KKR portfolio companies, to measure its coal consumption energy usage and its scrap losses.
The program has already led to quantifiable environmental results. Between the second quarter of 2014 and the first quarter of 2015, ATG’s calculations have shown:
• Coal consumption per ton of production has been reduced by ~90 kg / ton;
• Steam consumption has been reduced by 10 per cent per ton; and
• Scrap waste has been reduced by 4.3 per cent.
ATG expects the collective environmental savings from the gas project alone to equate to USUSD450,000 of annualised cost savings at ATG’s Israeli plant. ATG will continue to calculate the financial return on its other initiatives and will report the results next year.
“ATG’s core principles include being mindful of our environmental impacts. For example, waste-reduction has been a long-term goal for our business. KKR’s assistance in introducing new metrics and analytics to our initiatives helps us measure and improve upon our sustainability performance,” says Yogesh Mahansaria, Founder & CEO of ATG.
“We believe ATG is world-class in terms of its environmental sustainability efforts. We are thrilled that KKR and KKR Capstone could contribute analytical tools to complement ATG’s ongoing sustainability efforts. The ability to measure environmental impact while producing tangible cost savings highlights is the foundation of the Green Portfolio Program,” says Sanjay Nayar (pictured), Member & CEO of KKR India.
