BKT to Increase Capacity by 66 per cent

BKT is set to embark on ambitious expansion plans designed to increase the company’s tyre production capacity by 66 per cent. The Indian company currently runs three tyre factories located at Waluj (Western India), Bhiwadi (Northern India) and Chopanki (Northern India). In terms of tyre numbers this means BKT will more than double radial tractor tyre capacity to 250,000 tyres a year. Total capacity for heavy earthmover tyres will be raised from 10,000 to 50,000 tyres per annum.

According to the manufacturer, the expansion project will cost 3 billion rupees (£39 million) and will see the company’s capacity increase to 100,000 tonnes from its current level of 60,000 tonnes per annum (42,000 at Bhiwadi and 18,000 Waluj). The plans mean the Bhiwadi plant will now produce 48,000 tonnes, while the company’s Waluj facility will be upgraded to cope with 22,000 tonnes. The remaining 30,000 tonnes of tyres will be produced at BKT’s Chopanki factory.

The Indian company said it is also exploring the possibility of establishing distribution networks, primarily in regions where it is not well represented (e.g. North America). BKT said it would do this through joint ventures or acquisitions.

Over 70 per cent of BKT’s sales come from the European markets, where in addition to sales under it’s own “BKT” brand, it also undertakes contract manufacturing for other European tyre companies such as Vredestein, Nokian and Trelleborg Wheel Systems. The company said it had “no plans to enter direct distribution” in Europe.

BKT’s board also gave approval to plans to increase Foreign Institutional Investors’ holding from 24 per cent to 49 per cent and for raising fresh capital up to a maximum amount of £28 million to fund it’s expansion programme.

BKT is the tyre manufacturing arm of Balkrishna Industries Ltd, which itself belongs to the Siyaram Poddar Group – a £170 million business conglomerate. BKT specialises in manufacturing OTR, industrial, agricultural and earthmover tyres and expects to achieve sales in excess of £68 million in 2005.