Tyre maker Balkrishna Industries has started looking at other markets to import chemicals and raw material, as it seeks to reduce its dependency on China amid the government's call to make domestic economy self-reliant, a senior company official has said.
Balkrishna Industries (BKT) manufactures agricultural, off-road and all terrain vehicles tyres for exports and domestic market.
Its manufacturing facilities are located at Bhiwadi and Chopanki (Rajasthan), Waluj, Aurangabad (Maharashtra) and Bhuj (Gujarat). As much 80 per cent of its sales come from the overseas markets.
Its sales volume in the 2019-20 stood at 2,01,760 metric tonne, showing de-growth of 4 per cent year-on-year impact due to Covid-19.
"We have very negligible exports to China. So, we do not have much exposure to the country. As far as imports are concerned, there are some chemicals and very few portions of raw material that we import from China but there are other countries also (into exports of these input materials).
"And we have already started to look at other markets to reduce our dependence (on China)," Rajiv Poddar, Joint Managing Director, Balkrishna Industries Ltd (BKT) told PTI.
Poddar said the company sources carbon black, key input material, from its own plant.
ALSO READ: Ericsson India eyes contracts in Indian market on strength of technology
BKT is the only tyre maker in the country, which has its own Carbon Black plant at Bhuj, with its total current capacity at 1,40,000 metric tonne per annum.
The second phase of the project with a capacity of 80,000metric tonne per annum was commissioned on March 12, this year. Besides meeting its own requirement, BKT sells Carbon Black to the market also.
Poddar said his company wants to support the Indian market, which has seen a reasonable pick up in demand.
The company is expecting pick up in industrial construction and mining, a sector which the government is pushing to open up, he said, adding "with these things coming up, we see some possibility of good demand".
"Indian (sales) was about 15 per cent (for BKT) but looking at the current times, we want to support this market. So, we are looking at increasing it to at least 20 per cent. We will see higher (sales) numbers compared to last year going to India this fiscal," Poddar said. He said BKT's investment plan remains on track, even as there might be a delay of a quarter.
"We have not cut down our investment plans at all, and they remain on course," he emphasised.
The company has already said it expects to spend Rs 600 crore this fiscal largely towards its ongoing capex programme as well as routine maintenance capex as against Rs 761 crore incurred last fiscal.
It reported a 21 per cent higher profit at Rs 945 crore last fiscal. Its total production during the year stood at 1,94,000 MT.
Europe and the US are its biggest exports market, with around 51 per cent and 17 per cent sales volume coming from these two markets.