Balkrishna Industries, which manufactures tyres for agricultural and other equipment, is debottlenecking and expanding capacities at its Aurangabad plant.
MUMBAI: Balkrishna Industries, which manufactures tyres for agricultural and other equipment, is debottlenecking and expanding capacities at its Aurangabad plant.
The company will spend Rs 180 crore this year towards streamlining production and warehousing, following a robust increase in demand for agricultural tyres.
“We are planning to enhance production, de-bottleneck and expand existing capacities at Aurangabad plant apart from setting up new warehousing facilities,” said Arvind Poddar, managing director of the company, said at an analyst conference after announcing results.
“We will be expanding our volumes for the current year to 1,65,000 tonnes from the last year’s figure of 1,40,000 tonnes.”
The company will construct two new warehouses, one for finished products and the other for raw materials.
Poddar said that the coming years hold good for the company as demand for the products continue to be strong. Farmers are making a lot of money and they are investing a lot in new products, he said.
Balkrishna’s profit after tax (PAT) has declined to Rs 14.38 crore for the quarter ended June 30, 2008, as against Rs 21.24 crore for the same period last year.
The company’s realisation, which was Rs 128 per kg for the same quarter last year, has gone up to Rs 151 per kg this year.
Poddar said raw material costs have gone up considerably but the company has managed to increase prices in the range of 5% to 11% across the board.
“Price increase is inevitable and every company across the world is passing the burden to the customers,” he told DNA Money.
“Overall, we have increased our prices to about 5% on an average.
We will be increasing prices in America by 11% in August and also raise prices in the European market by October.”
He said rubber prices have already risen and won’t be increasing any further. “There can only be a marginal increase but nothing more than that,” he said.
Net sales for the first quarter stood at Rs 297.23 crore as against 228.14 crore last year. The company has reported a forex loss of Rs 31 crore for the first quarter.
shubhashish@dnaindia.net
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