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Executive Interviews

Poddar: BKT is ‘Fully Geared’ For Future Growth

BKT-Arvind-Poddar-1

BKT Tires has had quite significant growth over the past decade: the company, headquartered in Mumbai, India, opened two manufacturing plants as well as its own carbon black plant, which is contributing to its own sustainability efforts among much other growth. With the manufacturing capacity and innovation to back up its growth, BKT has invested in its future to serve the OTR, ag and industrial tire industries across the globe for years to come.

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We caught up with Arvind Poddar, chairman and managing director of Balkrishna Industries, to dig into the company’s recent investments and what its plans are for future growth.

TR: What are you seeing in terms of demand in the Americas, particularly in the ag sector?

Poddar: The demand for ag tires is expected to continue strongly due to various geo-political factors as well as many other external reasons. We at BKT, are fully geared for the same and have already invested a lot in capacity building. Our additional agri radial capacity at the Bhuj plant has been very helpful in reducing the lead times drastically.

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TR: Over the last 10 years, BKT has opened two production plants in Bhuj and Waluj. Over the last five years, how have those plants played a part in BKT’s expansion strategy? What positive returns are you seeing from the investment in the carbon black plant?

Poddar: The Bhuj plant, the largest by BKT, was opened in 2015 and the second plant was opened in Waluj, Aurangabad, in the year 2021. These plants have played a very critical role in the growth strategy of BKT as they have been set up in a period, which preceded when BKT was in an exponential growth phase. This production availability on the back of this demand has been key to our growth and the decision to build them was a fruitful one.

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Regarding carbon black production, the decision to install this within our Bhuj plant has proved to be a boon for us in many ways. We have avoided the lean supply pipeline for this vital raw material, especially during the pandemic. Moreover, we are now self-sufficient for this critical raw material and are also able to enhance the quality of our end-products (ie. tires) with a very high grade of carbon black being made in-house. It’s also a great example of sustainability as we are using the waste gas generated from carbon black production to generate electricity as well as steam generation, which is eventually used for tire curing. This has resulted in a reduction of coal consumption… I am happy to say that BKT is the only tire manufacturer with an integrated and in-house carbon black production facility.

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TR: Last September, BKT began trial production at its new plant in Waluj. At what capacity is that plant operating? When will it be at full capacity? Why did the company see medium and small-diameter ag and industrial tires as a growth area? In what other tire segments has BKT experienced growth over the last two years?

Poddar: The new plant at Waluj is very close to our existing and the first-ever BKT plant in the same city. The plant will soon reach its 100% capacity, which is 30,000 metric tons (66 million pounds) per year. Medium and small-diameter ag and industrial tires have been in higher demand in the recent past, and our capacities were not matching. The new plant will fill this gap, and we are now able to offer all products needed by our worldwide customers, in the quantities desired by them. The other tire segments where we are experiencing growth are the OTR all-steel radial tires, as mining activity picks up and the demand for large OTR tires sees a surge. Thankfully, BKT invested in them in the previous years and is now securely placed to cater to this demand.

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TR: BKT is heavy-handed in sustainability efforts, whether it’s at its plants or elsewhere. I saw the company has a goal for all its plants to be powered by solar by 2025. On the topic of sustainability, OTR tire recycling was a big topic at this year’s OTR Conference. In what ways do you see in the future that BKT can contribute to further developing a circular economy for off-highway tires?

Poddar: The focus of BKT’s philosophy lies in its care and concern for all its stakeholders. This is reflected in the motto “sharing is caring” – a secret and the reason why we have been “Growing Together” for so long. Our approach is to reduce dependence on non-renewable energy and reduce emissions.

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We reduced our non-renewable energy usage by more than 16% in financial year 2020-21. Our wind farm in Rajasthan has an installed capacity of 5 megawatts per day, feeding about 50% of the energy needs of our Bhiwadi plant. Our solar plants at Bhuj and Chopanki (1-megawatt capacity each) further supplement our efforts in green energy. We plan to upgrade our solar capacity to 5.5 megawatts in the future. Our extensive green belts continue to contain emissions. Our multiple projects at the plant level and clean tech solutions provide additional savings in energy and emissions. BKT is contributing, directly and indirectly, to various tire recycling projects worldwide and is keen to pursue [these actions] further to make the entire world a very sustainable and worthy place for everyone to live.

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TR: I wanted to check in on your view of the tire supply chain, particularly when it comes to the off-highway segments BKT serves- OTR, ag, industrial, etc. We know raw material and container availability was difficult during the pandemic. How is the supply chain situation for BKT now, especially in getting tires to its North American markets (US and Canada)? How is BKT offsetting high logistics costs? What effect does this have on BKT dealers?

Poddar: Yes, the supply chain situation for imports as well as exports was very precarious during and sometime after the pandemic. BKT could not remain unaffected. But, we have offset these higher costs by absorbing most of it into our pricing and passed only a small part to our customers. The import situation has slightly eased and the raw material supply is better. However, the ocean freight rates for exporting products, especially to North America, have still not reached normal levels… However, we still have a long way to reach pre-pandemic levels of conditions in the supply chain.

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TR: What would you like BKT tire dealers in North America to know as the company moves forward with its growth?

Poddar: With these additional capacities, we have not only invested in production output but have invested in the future – a future in which BKT strives to become the most reliable and quality supplier for its customers. This means BKT is arranging to set another benchmark in sustainability by assuring a perpetual supply of quality off-highway tires, not only for its North American customers but also for its customers based in more than 160 countries today. BKT understands and constantly tries to create a win-win proposition for all its stakeholders by investing in the future. This means creating the best quality off-highway tires produced in the most sustainable manner using raw materials from sustainable origins and ensuring a decreased carbon footprint.

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