Off-Highway Tire Specialist BKT to Build First US Plant
LAS VEGAS—BKT USA Inc., the U.S. subsidiary of India-based Balkrishna Industries Ltd., announced during the recent Specialty Equipment Market Association Show here that the off-highway tire specialist company is planning to soon build a U.S. tire plant. The $100 million factory will be BKT's first outside of India and fifth tire plant overall.
BKT also disclosed recent investments of more than $200 million have been made to upgrade and expand capacity for tires and carbon black at its plants in India, projects that will overlap with and supply the U.S. plant when it comes on stream. BKT is India's fifth largest tire maker and ranks No. 39 worldwide on Rubber & Plastics' 2018 Global Top 75 rankings, based on fiscal 2017-18 sales of $692 million.
To move the project forward, BKT will establish a new subsidiary in the U.S. Its first undertaking will be to select an appropriate site for the plant and acquire 120 or more acres, which should be finalized by the end of March 2019. Mehta said 40 sites are under consideration in several states, including Georgia, Mississippi and South Carolina, states where several plants have opened recently or are under construction. Sites in Alabama, Indiana and Kentucky also are being considered.
The list of sites will be whittled to four, from which one will be chosen by January, according to Rajiv Poddar, joint managing director of BKT. He expects site preparation to take three to four months from the day they select the land. The target date for the plant to open, he said, is 24 months from the groundbreaking—at this point, the second quarter of 2021.
Mehta said BKT is considering several factors in its site selection process: qualified labor, a strategic location and transportation, among them. BKT says the plant will have nameplate capacity of 20,000 metric tons per year, smaller than any of the company's four plants in India. By comparison, the company's newest factory, in Bhuj, Gujarat, India, is rated at 130,000 tons per year.
At first, BKT plans to manufacture its entire line of ag radials at the new plant before expanding capacity to include tires from other segments. BKT is also building a carbon black plant on property adjacent to its Bhuj, India, plant. The new plant, rated at 140,000 metric tons a year at full capacity, will supply the new U.S. plant in addition to BKT's Indian facilities. It will cost $61.6 million, start producing at an annualized rate of 80,000 tons when complete in March, and ramp up to full capacity by March 2021.