Materials costs 'put heat' on BKT

Crete, Greece – Balkrishna Industries Ltd (BKT) is currently ”feeling the heat” from pressure on the supply and price of some of its main raw materials, according to top officials of the Indian off-road tire maker.

The biggest current issue for BKT – and, indeed, all Indian tire and rubber product makers –  is around carbon black, which is in short supply due to the imposition of restrictions and tariffs on Chinese suppliers.

“Currently nobody knows what is going to happen with carbon black,” said Arvind Poddar, chairman and managing director of BKT. “There is a shortage because of the closure of various plants due to the environmental situation.”

The impact of this shortage is being exacerbated by rising oil prices, which are further pushing up the cost of carbon black, the BKT leader pointed out at a 6 June press conference in Crete.

On a more positive note, BKT is establishing its own carbon black plant, which is set to commence production in the first quarter of 2019.

However, the MD and chairman said that the facility will "be mainly not for pricing, but to get regular and much better quality of carbon black which will help us in further improving our products.”

Regarding other raw materials, the BKT leader said “fortunately natural rubber is stable, but [prices for] all other raw materials such as synthetic [rubber] chemicals are going up due to the oil situation.”

These views were echoed by BKT joint managing director Rajiv Poddar, who in an interview told ERJ: “We are feeling the heat from the raw materials [market].”

BKT, he said, hopes to reduce the pressure on customers by trying to defer any price increase as far as possible

“But I think we would be looking at another price increase towards the second half of the year,” concluded Rajiv Poddar. “If you look at the numbers it could be very high but we are trying to evaluate the bare minimum that would be needed.”