Companies

Balkrishna Industries completes Phase I of expansion plan, Bhuj plant begins production

M. Ramesh Chennai | Updated on October 10, 2012 Published on October 10, 2012

Balkrishna Industries has just commissioned the first phase of its tyre plant at Bhuj, Gujarat. The greenfield plant is a part of the company’s Rs 1,800-crore expansion programme that would end in 2015. 

Balkrishna Industries is a manufacturer of off-the-road tyres, or tyres that are used in earthmoving and mining equipment. In 2011-12, its turnover was Rs 2,800 crore, about 90 per cent of which came from exports. The company is a part of the Siyaram group, and is the holding company of Balkrishna Tyres, Balkrishna Paper Mills and Balkrishna Synthetics.

Balkrishna Industries currently has a capacity of 1,44,000 tonnes a year. The company is on an expansion programme that would nearly double the production of tyres. The expansion is happening in two ways — de-bottlenecking the existing facilities, which will give it an additional capacity of 12,000 tonnes a year, and implementing a Rs 1,800-crore greenfield project at Bhuj. When the Bhuj plant is fully built in 2014-15, the company’s capacity will be 2,70,000 tonnes.

Recently, the company commissioned the first phase of the plant, with a capacity of 25,000 tonnes. Around 60 per cent of the total capacity at Bhuj will cater to manufacturing radial tyres, which enjoy 8-10 per cent higher margins compared with cross-ply tyres.

The company’s management recently told analysts that the new plant will result in reduction of logistics costs and power and fuel costs as it is located close to the Mundra port and also has a rubber mixing plant besides a captive 20MW power plant. The company has not responded to an e-mail query from Business Line seeking additional details.

The company sees a revenue potential of  Rs 3,000 cr annually from the Bhuj plant, once fully operational by 2014-15.

Balkrishna Industries has told analysts that while Chinese products are priced lower than the company’s products, quality concerns of the former have led to their lower acceptability in the markets. Thus, the company sees no threat from Chinese competition. 

On the BSE today, the Balkrishna Industries share, of face value of Rs 2, opened at Rs 284.55.

 

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Published on October 10, 2012
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