Maharashtra, India – Off-highway tire manufacturer Balkrishna Industries Ltd. (BKT) is suspending its plans for a US tire factory, citing "business uncertainties" related to difficult macroeconomics and the "volatile" climate conditions.
BKT announced plans last October to build a $100 million (€89 million) plant in the US, saying the investment would help it accelerate its business with North American equipment makers.
The Maharashtra-based tire maker disclosed its decision to put the plans "in abeyance" in a first-quarter fiscal 2020 financial document, but did not elaborate on the statement.
The projected US plant was slated to open in the first half of 2021 with a nameplate capacity of 20,000 tonnes per year.
That's smaller than any of the company's four plants in India. By comparison, the company's newest factory, in Bhuj, Gujarat, is rated at 130,000 tonnes per year.
For the quarter ended 30 June, BKT reported a 27.9% drop in pre-tax operating (EBIT) income on 13.9% lower sales.
This is the third US plant project involving foreign investors to be suspended in recent years.
Most recently, it was revealed that Qingdao Sentury Tire Co. Ltd. had put on hold indefinitely plans to build a car and light truck tire plant in the US, according to various sources close to the project.
The company had disclosed plans in September 2016 to invest $530 million to build a plant in Troup County, Georgia, to produce 12 million car and light truck tires a year at full capacity.
In June 2018 Guangzhou Vanlead Group Co. Ltd. was forced to put on hold indefinitely plans it had announced in 2017 to invest $1 billion in a tire plant in South Carolina.
Guangzhou Vanlead, a China state-owned entity that controls Wanli Tire Group, had proposed building a tire plant in Orangeburg County, South Carolina, capable of producing 6 million consumer tires annually in the eight-year project's first phase.