One month after Balkrishna Industries Ltd. (BKT) reopened its five plants in India, the company is once again manufacturing tires at near maximum capacity.
BKT temporarily shut down the plants in mid-March due to concerns around the COVID-19 virus.
The company has quickly ramped up production at those facilities, which are currently achieving utilization rates of more than 80%, according to Arvind Poddar, the specialty tire manufacturer’s chairman and managing director.
“We are gearing up to ship orders as quickly as possible,” he says.
India reported its first confirmed COVID-19 case on Jan. 30. The Indian government, under Prime Minister Narendra Modi, ordered a 21-day lockdown, starting on March 24. The lockdown was extended through the end of May.
Poddar says BKT was extremely proactive in adjusting its operations to ensure the well-being of its employees and customers. “Our company’s first priority is the safety of all of our employees, and we have taken no risks.”
This included closing BKT’s main office in Mumbai, as well as its offices in other countries, as employees rapidly shifted into work-at-home mode.
Facilities that have reopened are abiding by “strict health rules and regulations, imposed by the government and driven by our own safety regulations,” says Poddar.
Focus on OTR/ag tires
The impact of the company’s six-week production suspension was “difficult. Thankfully, BKT had been very prepared in terms of raw material stock.”
BKT’s focus on OTR and ag tires also proved to be a saving grace.
Initially, demand for OTR tires dropped by 40% to 50% as mining, quarry and construction activities slowed.
“And the impact was felt by the farming community in terms of cash flow, lack of available workforce, salability of finished products, slack demand in export markets, a drop in crop prices and other reasons,” notes Poddar.
Yet despite these challenges, the impact to OTR and ag tire demand “was comparatively less than in the passenger and light truck tire markets,” he says.
The company’s research and development activities have remained unimpeded, as well. And new product launches will continue as planned, he adds. (In mid-May, BKT introduced a new tire, the LIFTMAX LM 63, which is designed for port and industrial applications, among others.)
“We are blessed to have our own mold-making factory. We roll out 60 to 70 new products every year, in most segments of OTR tires, and will continue to do so.”
Constant communication with distributors and dealers has been critical to keeping tabs on market fluctuations, according to Poddar.
“We are in constant touch and have been transparent in giving them the factual position on all fronts. This, in turn, has helped them plan better and have clear expectations.”
Poddar reports that he has personally contacted all of BKT’s key clients.
“We are confident that with our fair policies, all our channel partners have been satisfied. We have focused heavily on training during the lockdown period. Of foremost importance to all is to be safe – working smartly without taking undue risks.”
BKT is encouraging customers to “watch cash flow very closely, carry the right inventory and be prepared to ramp up as business opens. We expect demand to pick up faster in the OTR segment. We will do our best to ensure that we supply the tires that (customers) need on time. We have continued to provide after-sales service, using the communication mediums available, to our distributors and dealers.”
Return to normal?
When will markets return to what was considered “normal” just three months ago?
Poddar says that “nobody can truly predict that. This is an unprecedented occurrence and until a vaccine is found, nobody can say. A complete solution will take a long time (to achieve.) We expect it to fold into the new year and beyond.
“We would like to thank all who have played an active role in mitigating this crisis,” he says. “And we urge all to be patient and continue to have courage, as this will pass.”
In the meantime, he tells customers, orders are on the way. “Our factories are up and running – and production and shipments have started.”