BKT to Build its First Plant in the United States

BKT USA Inc., the U.S. subsidiary of off-highway tire specialist, Balkrishna Industries Ltd., announced during the recent SEMA show in Las Vegas that the company is planning to set up its first factory in the United States. BKT plans to invest an amount of USD 100 million in the plant. The factory will be BKT’s first overseas tire manufacturing facility and its fifth factory overall.

BKT also revealed that the company has invested more than USD 200 million recently to upgrade and expand capacity for the production of tires and carbon black at its factories in India. These facilities will overlap with and supply the plant in the United States when it becomes operational. BKT is the fifth largest manufacturer of tires in India and ranks No. 39 worldwide on Rubber & Plastics’ 2018 Global Top 75 rankings. In the 2017-18 year, the company had sales of $692 million.

In order to set up its plant in the US, BKT will establish a new subsidiary in the U.S. The first task will be to select a suitable site for the plant and to acquire 120 or more acres. The company hopes to complete , this process by the end of March 2019. About 40 sites across different states like Alabama, South Carolina, Indiana, Georgia and Mississippi are under consideration.

From these 40 potential sites, a shortlist of four sites will be prepared and the final site will be chosen by January, according to Rajiv Poddar, joint managing director of BKT. Once the site is finalized, the timeline for site preparation is three to four months from the day they select the land. The plant is expected to become operational 24 months from the groundbreaking and based on the current plans, BKT expects the new plant to be open by the second quarter of 2021.

Several parameters are being considered for the site selection process including the availability of qualified labor, a strategic location, and ease of transportation. BKT said that that the plant will have nameplate capacity of 20,000 metric tons per year, which is smaller than the company’s other four plants.

BKT is planning to initially make its complete range of ag radials at the new US plant before ramping up its capacity to manufacture tires from other segments. BKT is also building a carbon black plant on property adjacent to its Bhuj, India, plant. The new carbon black plant, which will have a maximum annual capacity of 140,000 metric tons, will supply the new U.S. plant in addition to BKT’s factories in India. It will require an investment of USD 61.6 million, and will start producing at an annualized rate of 80,000 tons when it is complete in March, and ramp up to full capacity by March 2021.