BKT: In Expansion Mode

Balkrishna Industries Limited (BKT)

Unfazed by the Covid-19 crisis, OTR manufacturing behemoth Balkrishna Industries Limited (BKT) is continuing to work on its long-term business plans.

Even while sales of OTRs in India and in global markets remain bearish, BKT continues to burn rubber with its strong grip on road surfaces. It is expanding its business aggressively while keeping operating costs low in order to pass on the benefits to its customers.

Rajiv Poddar, Jt Managing Director, Balkrishna Industries Ltd.
Says Mr. Rajiv Poddar, Jt Managing Director, Balkrishna Industries Ltd., “No doubt, the demand of OTRs and other tires are low due to the overall lower demand from many sectors. Plus, companies have curtailed their capital investments due to diminished liquidity. However, we believe that this is a temporary phase as the Indian economy has strong demand fundamentals in many sectors like agriculture and mining, which are performing well, which will generate demand and in turn good revenues. We believe that this is a short-term slump and demand is likely to rise again in the medium and long-term, when the situation is likely to normalize.”

He concedes that though the competition is becoming stiffer as companies are aggressively marketing and branding their products, it helps us being a longstanding brand in this segment of tires. “However, we are geared up to meet competition as BKT enjoys a strong brand recall in both global and domestic markets. Our tires are in great demand as they are of superior composition and have an innovative tread design that helps lower the cost of operation per km with resultant lower fuel cost per hour. We have plans to expand our product line with products like the new Ultra Large OTR’ tire for rigid dump trucks to complete our bouquet of offerings.”

BKT is on course with its expansion plans and is all set to revamp its first plant in Aurangabad, in addition to further modernizing the Rajasthan facility and adding new products to the Bhuj facility. The company already has a first of its kind testing track in India, at its Bhuj plant. BKT has a production capacity of 1,40,000 tons per annum. As part of its expansion plans and to enhance productivity, the company is revamping its facility in Aurangabad. The Bhuj plant has an advanced rubber testing facility for chemical, physical, and rapid control tests. The tests are conducted to examine the character of the rubber after mixing of the final compound. Its first of its kind testing track in India can test the endurance, performance and driving comfort of its tires on different surfaces - ranging from uniform road conditions to rough terrains such as concrete, bitumen and farm tracks with pebbles.

It has begun the production of highest quality carbon black for internal consumption in full swing, and has also enhanced customer satisfaction, with a special focus on delivering life cycle costs and best support services for the products. Informs Poddar, “We have recently begun production of carbon black as one of the key raw materials for production of OTR tires at our Bhuj facility and have also begun marketing the product which is of the highest quality. Our backward integration will further improve our product quality, while keeping costs down. To scale up business, we will continue to focus on replacement and retail markets with our in-site product support initiatives and are also looking at new segments like mobile cranes. We are looking to work with major crane OEMs and the end-users both in the global and domestic markets. We plan to develop advanced solutions through co-engineering alliances with international OEMs. Accordingly, we will adhere to their quality standards to deliver total life cycle costs and will provide the necessary support services for the products. We are also looking at opportunities in infrastructure construction equipment.”

BKT believes quality and technology of the product is key for future and looks to grow the business sustainably even in the face of challenges from competition, spiraling fuel prices, and the current logistics supply disruptions due to the pandemic. The customer should essentially get the best quality at the most economic cost. Says Poddar, ‘We are working with our customers very closely and trying to integrate our product supply chain with theirs for timely availability of our products. The Covid-19 crisis, social distancing, and dearth of operating personnel is likely to increase mechanization for higher and faster mobility across sectors, which will also drive demand for OTR tires.”

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