In 2010, Balkrishna Industries Ltd. (BKT for short) was a $300 million tire manufacturer. Its off-highway products, including OTR and agricultural tires, were produced in three plants in India. The tires were not exported on a global basis.

But the Poddar family was made up of visionaries. In a line that extended from late founder Mahabirprasad Poddar to Arvind Poddar to Rajiv Poddar, the mantra always has been “to be the best.” In 2010, BKT was not the best. It needed to grow.

The new BKT off-highway tire plant in Bhuj, India, cost $500 million.

The new BKT off-highway tire plant in Bhuj, India, cost $500 million.

That’s when the decision was made to build a fourth plant at a cost greater than the company’s annual sales. A move like that can either make or break a company.

The city of Bhuj, India, strategically located near the Kandla Port, was chosen as the site for the $375 million plant. BKT also was able to secure a 312-acre parcel of land to accommodate not only the plant but also an R&D Center, test tracks and employee housing.

How the Poddars could envision a plant -- a community, really -- on 312 acres of desert land is anyone’s guess. I’m sure the herds of bears, buffaloes and foxes in the area thought they were crazy.

The location also was known for seismic activity; preparing the plant for an earthquake measuring 9.0 on the Richter Scale helps explain some of the cost overruns.

In the end, the now-$500 million plant was completed, and will be at full capacity in 2017. It doubles the tire production capacity of the company, which, even before the plant was operational, was exporting tires to more than 130 countries, including the U.S.

The Poddars’ faith in their company paid off in a big way.

Deciding to build a $375 million plant when your company has annual sales of $300 million is a pretty big risk. There are bigger risks, however.

As fellow visionary Mark Zuckerberg, co-founder of Facebook says, “The biggest risk is not taking any risk.”

As part of the recent "Game Changer Conference" hosted by BKT, close to 600 dealers, suppliers and journalists were recently invited to visit the plant, which is located in the state of Gujarat and the city of Bhuj. Modern Tire Dealer Editor Bob Ulrich was one of them. This is the last of his four news reports. To read the other three reports, check out these links:

"Chairman Arvind Poddar: Ag and OTR Tires Lead the Way at BKT."

"BKT’s Rajiv Poddar: “Plant was needed to ‘seize sales opportunities.”

"BKT Is Close to Doubling Its Tire Production Capacity."

Author

Bob Ulrich
Bob Ulrich

Editor, Retired

Editor Bob Ulrich has earned a reputation as an industry expert thanks to his insightful, in-depth articles and blogs on the tire industry. Before joining Modern Tire Dealer in 1985, Bob earned a B.A. in English literature from Ohio Northern University. Also, he graduated from the University of Akron School of Law with a J.D.

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Editor Bob Ulrich has earned a reputation as an industry expert thanks to his insightful, in-depth articles and blogs on the tire industry. Before joining Modern Tire Dealer in 1985, Bob earned a B.A. in English literature from Ohio Northern University. Also, he graduated from the University of Akron School of Law with a J.D.

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