Turkish parent company names new CEO for Buhler Industries

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This article was published 01/04/2024 (568 days ago), so information in it may no longer be current.

Turkish company Basak Traktor has named one of its executives, Zafer Ozbalaban, as the new CEO of Buhler Industries Inc.

Late last year, Russian agricultural equipment company Rostselmash sold its stake in the longtime Winnipeg firm to the subsidiary of ASKO Holding.

As if to make sure Monday’s announcement would be met with goodwill from the rest of the management team, Basak Traktor also announced it is lending Buhler’s Versatile tractor division $14.4 million.

In announcing the loan, the Turkish company said it is “fully supportive in growing sales in Buhler Industries.”

The company released its year-end financial results over the weekend, showing revenue was slightly down from the previous year, at $238.5 million. It also posted a $7-million profit — only the fourth time in the last decade Buhler ended a year in the black.

Its new CEO has an MBA and mechanical engineering degree and was the executive board member of the Basak Traktor’s parent company in charge of research and development and strategic planning.

Company officials were unavailable for comment Monday, but another weekend release from Buhler Industries said new ownership has streamlined operations during the current quarter “expected to result in significant full-year savings.”

In the year before the sale to Basak Traktor, Buhler had sold off real estate assets and cut costs, not unusual for a company in the process of finding a buyer.

Basak Traktor said it intends to increase production in 2024, and to produce better profit margins, as well. The company has said the moves are designed to bring Buhler back to profitability.

Buhler Industries, maker of the only tractor produced in Canada, has struggled — perhaps longer than other original equipment manufacturers — with supply chain disruptions.

However, even before the COVID-19 pandemic hit, its sales were on the way down. The $325 million in annual revenue achieved in 2015 has not been surpassed since.

Basak Traktor, a division of ASKO Holding, paid $60.5 million for 97 per cent of the shares of Buhler Industries that had been held by Combine Factory Rostselmash Ltd., which had acquired controlling interest in Buhler in 2007.

Part of the purchase price paid off loans Rostselmash had made to Buhler.

The new ownership continues to negotiate Buhler’s credit facilities with Canadian Imperial Bank of Commerce, a portion of which was paid at the time of the takeover.

A Winnipeg-based international trade specialist, who spoke on condition his name not be used, said the presence of international ownership of a company with a substantial legacy brand can be a good thing for the local manufacturing community.

“We need to strengthen Manitoba’s economy by having more international ties,” he said. “And those are not exclusive to exports. It’s a two-way street. That’s important for international trade and global reach.”

After Russia’s invasion of Ukraine in February 2022, several Russian executives with ties to the Putin regime were sanctioned by Canada. None of the Buhler board members were sanctioned, but one who was publicly connected to Putin resigned and there were activists who advocated for further sanctioning of Rostselmash officials connected to Buhler.

The Winnipeg company had consistently stressed its opposition to the war in Ukraine.

There are more than 1,200 dealers of Versatile and Farm King brand equipment across North America. While the company’s sales volumes are not anywhere near that of John Deere or Case and New Holland, there is plenty of brand loyalty.

John Schmeiser, chief operating officer of the North American Equipment Dealers Association and president of its Canadian division, said the new ownership ought to have a stabilizing effect on the Versatile brand.

“This will be well-received by our equipment dealers, no question,” Schmeiser said. “It brings stability to an iconic brand. This is what our dealers want.”

The trade specialist said the presence of an international executive in the community is an opportunity to enhance the level of understanding with that country, adding Turkish manufacturing likely has things to offer Manitoba, as well as access to markets without the negative connotations associated with the Russia-Ukraine war.

“It is very proactive and positive,” the trade official said. “I don’t see anything negative about it.”

martin.cash@freepress.mb.ca