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Highway of Growth [Jan 2012]

Belief in an effective two-way commitment in achieving a common goal as an important aspect, off-highway tyre manufacturer BKT relies on quality and service for its products
Balkrishna Tyres (BKT), a name to reckon within the off-highway tyre industry supplies tyres to almost all the major OEMs across the globe. The core strength of the company lies in its widest range of products with more than 1900 Stock Keeping Units, R & D focus, quick new product development process, commitment to quality and firm belief in after-sales services. Focusing completely on intensive market research, in-depth product knowledge and excellent product development capabilities; BKT increases its footprint in the niche segment.
Product rangeBKT is categorised as a ‘One Stop Shop’ for off-highway tyre solutions. Its unique range of off-highway tyres includes agricultural tyres (cross ply & radial), industrial, material handling and construction tyres (cross ply & radial), OTR tyres (cross ply & radial) and other special application tyres such as turf tyres, ATV, golf, go cart tyres and military tyres (puncture resistant and run flat). Apart from tyres for the replacement market, today BKT caters to major Original Equipment (OE) customers for their requirement of off-highway tyres, globally.
BKT’s products are being supplied to over 120 countries on a global platform. With the demand for products on rise, BKT is receiving excellent response from all the countries it is dealing with. Elaborating on the growth aspect, Arvind Poddar, Vice Chairman and Managing Director, Balkrishna Tyres (BKT) said, “We are continuously expanding and giving new range of products. This is the reason why we have grown 40 times in the last decade. Quality being the main focus makes us the premium producers in the world. We believe in service and the price has to be reasonable for the consumers. We not only sell tyre but sell a complete concept. The company takes necessary step and makes plans accordingly for the future”.
Advantage BKTThe prime advantages BKT offers are quality product, service backup etc. BKT’s tyres are cost effective taking into consideration the life of the tyre, running hours, and operational uptime of the equipment and use.The company mainly competes on an international level and benchmarks its products against leading players. BKT contribute 60 per cent of its production to the agriculture sector and 40 per cent to construction and mining equipment. At present BKT has a backlog of over six months. “We are expanding our capacity and also putting up a Greenfield project which will start its production in September 2012. However, to reach full capacity, it would take about 18 months as BKT’s products are all technical tyres therfore can’t be rolled-out on the first day itself”, said Mr. Poddar.
Market ShareThe company has a significant share in the global off-highway tyre market. Today, BKT exports around 92 per cent of tyre production to more than 120 countries across all five continents, in all the major markets of Europe, North & South America, Africa, Asia & Middle East. In India, it markets only 8 per cent of its entire production.
On Expansion SpreeBy 2015, BKT plans to have 10 per cent market share globally and in India the company expects to be the leading supplier in the market for industrial construction, mining and the speciality agriculture requirements. However, Mr. Poddar expresses, “There won’t be a substantial increase in terms of percentage, the 8 per cent may reach to 12 per cent but the expected overall growth of 12 per cent is going to be a big jump for the Indian market because the new facility will augment our capacity by 80 per cent. So, it will be more than double of the existing market share”.
Currently, BKT’s production capacity is about 150,000 metric ton (MT) out of which 8 per cent is being supplied to the Indian market. With the new plant being set-up at Bhuj in Gujarat with an investment of over Rs.1200 crore, the company plans to enhance its capacity to 270,000 MT.
“The new plant will further enhance the production for industrial, construction and mining related tyres”, Mr. Poddar informed.
Growth StrategyThe company achieved a top-line of over Rs 2015 crore and is expecting 40 per cent growth. Talking about the strategies to achieve this growth, Mr. Poddar said, “We are constantly enhancing our capacity within the plant. Research and Development is an ongoing process for us. The expenditure on R&D goes up to 4 to 5 per cent of our top line. We constantly improve on the efficiencies at all levels to get the organic growth. In terms of human resources, we recruit freshers as well as the people from the industry and provide them with training, so that they fit into our culture. Our marketing efforts have been enhanced over the last few years and we are heavily focused on building our brand, along with training to our direct and indirect associates including OEMs”.Service Beyond BusinessBKT offers excellent training to the OEMs which include training to their service personnel and dealers. The training is imparted not only in-house but also in the field, sharing knowledge on new products, tyre care & maintenance, and warranty etc.

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