COPLEY, Ohio — Make no mistake: North America has been and will continue to be a crucial market for the growth of specialty tire manufacturer Balkrishna Industries Ltd. (BKT).
It is so much of a priority that Arvind Poddar, chairman and managing director of the Mumbai, India-based tire maker, said the company diverted product to North America during the COVID-19 pandemic, despite high demand in other regions of the world.
"Our ultimate goal and thinking is that out of 100% (of BKT's global tire sales), this market should be about 25% to 30% in metric tires," Poddar told Tire Business during an exclusive interview held at the tire maker's North American headquarters in Copley.
He said BKT will continue to export tires to North America.
However, plans for a U.S. tire plant, which Poddar announced in October 2018 during his Tire Industry Hall of Fame induction acceptance speech, are "off the table."
BKT pursued building a plant — estimated at the time to be a $120 million investment — into 2019, evaluating several sites across the U.S. Later that year, however, the company suspended plans for the factory, citing "business uncertainties" related to difficult macroeconomics and the "volatile" climate conditions.
Poddar said that if BKT were to build another plant in the future, it would be in his home country. BKT operates four plants in India, including one in Bhuj, Gujarat, which opened in 2013.
"There is no problem in building a plant anywhere in the world," Poddar said. "But is there somebody willing to pay for it? Naturally when you are going to produce in any number of countries, the cost is going to be higher."
He said nobody is willing to pay more for the same tire.
"We are fine. There is no point in putting a plant in America or North America or anywhere else in the world (other than India)," he said.
BKT has invested heavily in its plants in India, investing between $500 million and $550 million in a series of expansions over the past several years, 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.
Completing the chemical plant in Bhuj has been fortuitous for BKT, particularly in the wake of Russia's invasion of Ukraine and the sanctions that ensued, restricting the import of carbon black from Russia.