MAHARASHTRA, India — The board of directors of Balkrishna Industries Ltd. (BKT) has approved a capital investment plan valued at $257 million to increase capacity at plants in India, including its large OTR factory in Bjhuj and a new factory being built in Waluj.
The board of directors also disclosed in a published document their intention to "shelve" the company's plans for a U.S. plant, which has been under consideration since late 2018. Those plans were suspended nine months later, in August 2019, due to "business uncertainties" related to difficult macroeconomics and the "volatile" climate conditions."
The document's use of the term "shelve" leaves open the potential for the project to be revived at some point, but for now the company said it is focusing on a strategy to "increase (its) share of business in USA markets by increasing supplies from India."
The U.S. represents 15% of BKT's global sales, according to the firm's third quarter financial report. This equates to about $130 million on an annualized basis.
The newly approved investment package calls for:
- $108 million to boost output of 51- and 57-inch OTR tires at the factory in Bhuj, along with debottlenecking and the installation of additional ancillary equipment. Overall capacity would be expanded by 50,000 metric tons per year.
- $88 million to complete work on a carbon black processing plant at the Bhuj factory complex and expand its capacity nearly 75% to 200,000 metric tons per year; and
- $60 million to carry our modernization, automation and technology upgrades at the Bhuj and Rahasthan factories.
In addition, BKT said work progresses on a farm/industrial/OTR tire plant being built in in Waluj, Maharashtra, that will replace a 30-year-old facility nearby. BKT said it expects the new plant to be operational by the first quarter of 2022 with a start-up capacity of 30,000 metric tons per year.