Balkrishna Industries Plans For Expansion
Balkrishna Industries Limited has informed that the board of directors of the company at its meeting approved a capex plan of up to USD100 million for setting up a Greenfield tire plant in the USA through a wholly owned subsidiary to be set up. The Company shall also incur capex of up to INR 1,000 crore for its Indian Operations. The entire capex will be completed within a period of 30 months. This is in addition to the current capex underway for the Carbon Black Plant.
The details of the Capex program are given below:
The Current sales volume have been around 30,000 MT in Americas. We are seeing increased traction in sales volume over the next few years. ln view of this, a local plant would accelerate our growth prospects in this Region. The Board of Directors has therefore approved setting up of a greenfield project with a capacity of 20,000 MT p.a. through a wholly owned subsidiary to be set up. The capital outlay will be up to USD 1OO million. The USA project will be funded via investments from the Parent Company and local debt. Various formalities of this project will commence now.
The following will be the capex plan for India:
In lieu of the existing production facilities, which require revamping, a greenfield project will be set up on a freehold land of 22 acres owned by the company which is within the 5 km radius of the current location. The capex for setting up of the new state of the art facilities will be approximately INR 500 crores including a Co-generation plant and in-house warehousing facilities for raw materials and finished goods. The new facilities will bring operational efficiencies compared to the existing plant leading to a recurring saving in operation. The existing plant will continue to operate till the new plant becomes operational. There would be no change in the capacity.
Looking at the overall demand in the higher diameter segment, the Board of Directors have approved a capex of up to INR 500 crores towards setting up a new line of 5,000 MT p.a. for layers of All Steel Radial OTR Tires and additional Mixing line in Bhuj.
The entire capex of INR 1,700 crores would be funded via a mix of Debt and internal accruals.