With More than Enough Capacity, BKT Doesn't Need a New Plant -- Yet

Bob Ulrich
Posted on August 13, 2019
BKT's $500 million plant in Bhuj, India, opened in 2015.
BKT's $500 million plant in Bhuj, India, opened in 2015.

Balkrishna Industries Ltd. (BKT) is putting its U.S. plant project on hold after 8 1/2 months of prep work.

“After reviewing various aspects of the project in the backdrop of current challenging economic and business environment, the board has decided to put the proposed project in abeyance or on hold,” said the company.

“In view of the above decision, we are suspending further working on the project, with immediate effect.”

In my opinion, that is a smart financial move, because production capacity is not yet a problem for BKT. I was at the grand opening of the company’s fourth plant, in Bhuj, India, in 2015, and that plant was designed to match the capacity of the other three plants combined within two years.

At the time, BKT’s production capacity was greater than demand for its products. But the company’s board of directors also knew that in order to expand and keep up with radialization, the plant was necessary.

Four years later, demand has nearly caught up with supply. The Bhuj plant has the capacity to produce an estimated 450 to 480 metric tons per day, all radial ag, OTR and industrial tires.

In addition, BKT is in the process of modernizing its Aurangabad, India, plant, which includes increasing its capacity.

So given not only economic and political uncertainties, but also, from a logistics standpoint, unknown weather concerns (a site has yet to be chosen), I think it is financially prudent for BKT to suspend – not end -- the project.

Related Topics: B.O.B., Bhuj, commercial tires, farm tires, industrial tires, OTR tires, plant capacity

Bob Ulrich Editor
Comments ( 0 )
More Stories
The new Rein Automotive Oil Pan Kit (P/N ESK0172) comes complete with oil pan, gasket, drain plug, and aluminum torque-to-yield bolts, along with the torque specs.
Product

New Rein Oil Pan Kit Simplifies Service

The new Rein Automotive Oil Pan Kit (P/N ESK0172) from CRP Automotive is designed to simplify service on a wide range of European vehicles by allowing technicians to place one order and receive all of the necessary parts for a complete oil pan replacement.

CEAT will unveil the Farmax R70 tire in size 710/70R42 at the 2019 Farm Progress Show.
News

CEAT Unveils Farmax R70 Ag Radial

CEAT Specialty Tires Ltd. offers the Farmax R70 Ag radial tire in size 710/70R42 for farmers who need good traction and reduced soil compaction combined with good roadability.

News

Jack Williams Tire Adds Equipment Sales and Service Business

Jack Williams Tire Co. Inc. is expanding its business with the acquisition of the equipment sales and service division of PetroChoice LLC. The 90-year-old tire dealer will add 21 team members and will sell, service and install equipment from eight new brands.

The autumn rebate covers more than 80 sizes and tread patterns among Alliance's Agriflex 354, 363, 372 and 389 tire lines
News

Alliance Offers Rebates on IF and VF Farm Tires

Farmers can receive rebates of $100 to $125 per tire on purchases of two to 16 qualifying Agriflex increased flexion (IF) or very high flexion (VF) tires from Alliance Tire Americas Inc.

News

Texas Retreader Joins Marangoni Network

Texas-based KCT Retreads LLC, which goes to market as King Country Retread, has joined the Marangoni Tread North America Inc. independent dealer network and will offer Marangoni’s Ringtread brand throughout Texas, Oklahoma and New Mexico.

Sullivan Tire's multi-year agreement with the Bruins includes a partnership with defenseman Torey Krug. (Photo: Brian Babineau NHLI via Getty Images).
News

Sullivan Tire Contest Rewards Bruins Fans

Sullivan Tire Co. Inc. is offering Boston Bruins fans a chance to win two tickets to the final preseason game of 2019 and the opportunity to meet defenseman Torey Krug after the game.

News

Unimax Updates Its Online Look

Unimax Tire Ltd. has refreshed its website to help it display and market its seven retail banners available to tire dealers across Canada.

News

Simple Tire Is No. 383 on the Inc. 5000

For the second straight year, SimpleTire LLC has been named one of the fastest growing companies as well as the fastest growing automotive company in America by Inc. Magazine.

News

Michelin Workers in 2 States Ratify New Contract

About 2,500 union employees who work in BFGoodrich plants for Michelin North America Inc. have a new, three-year contract. The agreement covers United Steelworkers (USW) members in Tuscaloosa, Ala., and Fort Wayne, Ind.

Be the First to Know

Get the latest news and most popular articles from MTD delivered straight to your inbox. Stay on top of the tire industry and don't miss a thing!