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
Gustavo (Gus) Lima, CEO; Linda Bassitt, president; and Marco Zigni, vice president of the Latin American & Caribbean Tyre Expo, had the honor of cutting the opening ribbon to start the show. 
Article

Latin Tyre Expo Turns 10: New, Retreaded Tire Markets Were Examined

The Latin Tyre Expo celebrated its 10th anniversary in late June at the Atlapa Convention Center in Panama City, Panama. The Expo has become the leading event for suppliers and manufacturers to connect with leading tire distributors and dealers from Mexico, Central and South America, and the Caribbean regions (LATAM).

News

Meineke Expands in North Carolina

Meineke Car Care Centers LLC has opened a location in Holly Springs, N.C. It is the first Meineke outlet for new franchisee Darrick Finan.

The new Toyo Extensa A/S II will be available in 55 sizes covering more than 80% of the vehicle market by the end of the first quarter of 2020.
News

Toyo Releases the Extensa A/S II

Toyo Tire U.S.A. Corp. has released the next generation of its value-oriented all-season tire for passenger cars, minivans, SUVs, CUVs, and light trucks: the Extensa A/S II.

The average shop in North America has a labor or “door” rate of about $100/hour. Simple financials dictate technicians earn 30% of door rate by productivity. Special thanks: Tyler Utley, Conrad’s Tire
Article

It’s Time to Raise Your Labor Rates!

Politics. Religion. Alldata vs. Mitchell 1. Flat rate versus any other pay plan. Yes, I’m going there. I want to address pay plans, but not in a way you’re probably expecting.

Figure 1: Identifying the TPMS steering wheel controls. All artwork courtesy of Toyota, License Aagreement TMS 1002.
Article

TPMS: Lexus RX Series, 2016-19

In Lexus RX Series vehicles (2016-2019), a tire pressure warning valve and transmitter (equipped with a tire pressure sensor and a transmitter) is installed in each tire and wheel assembly. 

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!