LAS VEGAS—Balkrishna Industries Ltd. (BKT) approaches business a little differently than most tire manufacturers.
Case in point: Instead of searching the globe for a carbon black supplier, BKT builds its own plant.
"We are different," Arvind Poddar, the company's chairman and co-managing director, said at the recent Specialty Equipment Market Association Show in Las Vegas.
The company's recent decision to suspend plans to construct its first U.S. factory—citing "business uncertainties" related to difficult macroeconomics and the "volatile" climate conditions—would seem to indicate the company will curtail investment until market conditions indicate otherwise.
Hardly. According to Poddar, BKT—which produces agricultural, industrial and OTR tires at four plants in India for the global market—is in the process of investing between $500 million and $550 million in a series of expansions, including:
- A chemical plant on the grounds of the Bhuj factory complex in northwest India for manufacturing carbon black;
- A new plant in Waluj, Maharashtra State, to replace a 30-year-old farm/industrial/OTR tire plant nearby; and
- Modernizing plants in Bhiwadi and Chopanki, located in India's northern Rajasthan State.
Phase 1 of the carbon black plant project at the Bhuj factory is complete, Poddar said, and Phase 2 to expand capacity will be completed by March. Once that happens, he said, the company will look to expand again.
Rated at 140,000 metric tons per year at full capacity, the plant supplies BKT's Indian facilities, at an annualized rate of 60,000 metric tons and will increase to 80,000 once Phase 2 is complete.
"We wanted to see how we can get a good quality, constantly," Poddar said. "Carbon black is a very crucial ingredient for producing the tire. What we have seen is, by using our carbon black, the quality of the tire has improved."
According to Minoo Mehta, president of BKT USA Inc., flue gas from the carbon black plant provides fuel for the adjacent tire plant.
"It makes us more green, more sustainable," said Doug Kershaw, vice president of BKT USA.
In Waluj, in west-central India, BKT is building a new facility on a 40-acre greenfield site, about 2.2 miles from the older plant, which sits on a 10-acre plot, Poddar said. The new factory will have 80 percent new equipment.
Poddar said both plants will operate concurrently for a time to maintain current production levels, but once the new plant is completely onstream—the target is the third quarter of 2020—the older plant will be shut.
The plant in Bhiwadi produces radial tires for agriculture and bias-ply tires for agriculture and earthmoving applications as well as for the industrial sector, while the nearby Chopanki facility specializes in the production of steel radial tires for the industrial and OTR sectors.
"We decided to modernize both plants after seeing the result of the Bhuj plant, our latest plant (which opened in 2013), and the benefits we've seen," Poddar said. "The other main focus is always not quantity but quality. We always are looking to improve the quality, continuously."
The target date for completion of those projects is June 2020, Poddar said.