Commercial Business

More Off-Highway Tires to Come: New Plant in India will Double BKT’s Capacity

Bob Ulrich
Posted on January 25, 2016
Arvind Poddar linked the past with the present at   BKT’s “Game Changer Conference” in December. He held up a photo of his late father, company founder   Mahabirprasad Poddar, as other BKT associates, including his son, Rajiv (standing to his right), looked on.
Arvind Poddar linked the past with the present at   BKT’s “Game Changer Conference” in December. He held up a photo of his late father, company founder   Mahabirprasad Poddar, as other BKT associates, including his son, Rajiv (standing to his right), looked on.

‘Looking ahead is always our constant goal. A company that is unable to look at its own future with courage is like a person who is unable to dream.’ -- Arvind Poddar, chairman, BKT

In 2010, Balkrishna Industries Ltd., BKT for short, was a $300 million Indian 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 an executive line that extends from late founder Mahabirprasad Poddar to Arvind Poddar to Rajiv Poddar, the company’s mantra always has been “to be the best.”

So 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.

Five years and $500 million later, the Poddars’ faith in their company paid off in a big way. In December, close to 600 dealers, suppliers and journalists were invited to visit BKT’s fourth plant, a state-of-the-art, energy-efficient off-highway tire plant in Bhuj, India.

BKT began manufacturing tires in 1987. But in 2004, the company began producing radial agricultural tires, “a segment that still today represents the company’s main product segment, thanks to an extremely comprehensive range of products and solutions for the most varied and specific user needs,” said Arvind Poddar, chairman and managing director.

(BKT owns 32% of the replacement rear farm tire market in the U.S., according to Modern Tire Dealer statistics. It also has begun to supply both radial and bias rear farm tires to OEMs in the states.)

OTR tire production began in 2008 with bias tires. All-steel radial tire production, “an essential strategic move to strengthen BKT’s leadership in the off-highway tire market,” according to Poddar, soon followed.

At full capacity, the Bhuj plant will be able to match production at the other three plants combined. It is not unrealistic to think BKT also will double its sales revenue from $700 million to well over $1 billion in two or three years.
At full capacity, the Bhuj plant will be able to match production at the other three plants combined. It is not unrealistic to think BKT also will double its sales revenue from $700 million to well over $1 billion in two or three years.

BKT manufactures OTR tire sizes ranging from 17.5 inches to 49 inches; Poddar said the company will add 51-inch OTR tires to its product portfolio this year.

“BKT’s rapid and continuous development has been possible thanks to the substantial investments made in infrastructure,” Poddar said during a press conference held at the company’s headquarters in Mumbai, India. “Even the most brilliant ideas need to gain a solid foundation to be brought to life — in other words, people and technology.”

The investments have gone beyond the company’s national borders, he continued. BKT has opened four overseas offices: one in Europe, two in the U.S. and one in Canada. BKT products are sold in more than 130 countries worldwide.

“So, what is BKT’s dream?” said Poddar. “What is BKT’s vision? The answer is: to achieve the leadership in the off-highway tire market worldwide.”

Building the plant

‘When we dream alone it is only a dream, but when many dream together it is the beginning of a new reality.’ -- Rajiv Poddar, joint managing director, paraphrasing Austrian artist and architect Friedensreich Hundertwasser

The city of Bhuj, strategically located near the Kandla Port in India, was chosen as the site for the new $375 million plant. BKT also was able to secure a 312-acre parcel of land to accommodate the plant, an R&D center, test tracks, large tire warehouses and employee housing.

The land was essentially a desert, not only populated by herds of bears, buffaloes and foxes, but also known for its seismic activity and high winds. Preparing the plant for an earthquake measuring 9.0 on the Richter Scale and reinforcing the rooftops help explain some of the cost overruns.

“Showing great commitment and dedication, everything was created out of nothing,” said Rajiv Poddar, joint managing director.

When the new plant reaches full capacity in 2017, it will be able to produce 150,000 metric tons of off-highway tires annually. BKT’s other three plants produce 150,000 metric tons combined.

“Looking at figures and dimensions, Bhuj is a very impressive industrial complex,” said Rajiv. “Yet it is more than just a prestigious entity for production, research and testing. Bhuj is a small town offering manifold social and leisure facilities for those who work in our company and their families.”

In the “township area,” there are 406 flats for employees’ families and 90 rooms for university students who have opted to work with BKT. There are also jogging trails, a large recreation center for indoor and outdoor activities, a medical center and a mall.

The Bhuj plant also has its own fire station, with seven firefighting trucks and two ambulances.

‘The path has been paved’

'Always believe in your dreams, because if you don’t, you’ll not have hope.’ -- Mahatma Gandhi, Indian political leader and pacifist

More than 7,000 people are employed at BKT. They produce more than 2,400 SKUs of farm, OTR, industrial, ATV and lawn and garden tires.

Those numbers will increase as the Bhuj plant ramps up. It already is running at 46% capacity.

“Without ever losing sight of BKT’s fundamental values such as the care for our people, the care for the environment, and the care for our customers, Bhuj has enabled us to play a completely new game from the perspective of exponential growth and aiming at global leadership — even if we are just at the initial moves and the results are just a little gleam,” said Rajiv Poddar.

“The path has been paved, and soon, this gleam will shine bright unveiling the results. What remains to be done is to follow in the footsteps of our founder.” ■

Bhuj by the numbers

Here is a breakdown of Balkrishna Industries Ltd.’s new off-highway tire plant in Bhuj, India.

Plant cost: $500 million

Total acres: 312

Central area, plant: more than 72 acres

Outdoor track 25 acres

Township area: more than 15 acres

Plant build-up area: 3.5 million meters (11.5 million feet)

Raw material storage area: 20,000 square meters (215,278 square feet)

R&D center (when completed): 25,000 square feet

Daily present capacity: 120-150 metric tons

Daily full capacity (2017): 325 metric tons

Tire warehousing capacity: 25,000 metric tons

BKT also has off-highway tire plants in Aurangabad, Bhiwadi and Chopanki, India. Some 2,400 SKUs are produced at the four plants.

Related Topics: Arvid Poddar, Balkrishna Industries Ltd., BKT, Bob Ulrich

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