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 inability of consumers and independent auto service facilities, including tire dealerships, to access telematically transmitted vehicle data is "a crisis," Bob Hendry of Group 31 Inc. (for right), told Chanty Gbaye, legislative correspondent for Sen. Sherrod Brown (D-Ohio). "We need to cut it off at the pass."
News

Aftermarket Demands Access to Vehicle Data

A draft of a bill that would give car owners and independent auto repair facilities, including tire dealerships, access to telematically transmitted vehicle diagnostic and repair data is circulating on Capitol Hill.

Ziegler Tire celebrated its 100th anniversary at the Pro Football Hall of Fame in Canton, Ohio.
Blog

4 Generations of Zieglers Know How to Stay in Business

Ziegler Tire & Supply Co. celebrated its 100th anniversary at the Pro Football Hall of Fame in Canton, Ohio, last night, an appropriate venue because the National Football League is celebrating its 100th season this year. (Go Browns!)

VIP Tires & Service President and CEO Tim Winkeler (center) cuts the ribbon at the re-opening of the company’s newly renovated store in Brunswick, Maine. He’s joined by Chairman of the Board, John Quirk (right), and the entire Brunswick auto store team. 
News

VIP Tires & Service Renovates Brunswick Store

A 5,000-square-foot expansion to the VIP Tires & Service store in Brunswick, Maine, added four service bays, new shop equipment; inside storage for up to 2,000 tires and an improved and larger customer area.

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!