LAS VEGAS — It's strikingly evident that Balkrishna Industries Ltd. (BKT) approaches business a little differently than most tire manufacturers.
Need a better quality of carbon black? No need to search the globe for a supplier. Build your own plant instead.
Hear concerns about a soft market for agriculture tires and other OTR products? No worries, invest heavily.
Do you focus on building your product portfolio, or do you take on new products? Why not do both?
BKT willfully zigs while others zag.
"We are different," Arvind Poddar, the company's chairman and co-managing director, told Tire Business during the recent Specialty Equipment Market Association (SEMA) Show in Las Vegas.
- This story appears in the Dec. 9 print edition of Tire Business.
Case in point: 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 Mr. Poddar, BKT — which produces agricultual, 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 I of the carbon black plant project at the Bhuj factory is complete, Mr. Poddar said, and Phase II 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 a year at full capacity, the plant supplies BKT's Indian facilities, at an annualized rate of 60,000 tons and will ramp up to 80,000 once Phase II is complete.
"We wanted to see how we can get a good quality, constantly," Mr. 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," Doug Kershaw, vice president of BKT USA, said.
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, Mr. Poddar said. The new factory will have 80% new equipment.