Recently, BKT (Balkrishna Industries Ltd), one of India’s leading off-highway tyre manufacturers, completed a ₹800-crore expansion of its carbon black manufacturing facility in Bhuj, Gujarat. Annual production capacity has been increased from 265,000 MTPA (metric tonnes per annum) to 360,000 MTPA. (Carbon black is a fine, powdery material composed of elemental carbon that is used as a colorant in rubber compounds and
enhances tyre strength, traction, and grip.)
Instead of sourcing carbon black from external suppliers in the specialty chemicals sector, BKT is producing more of it in-house — a move that reflects a broader strategy of vertical integration in the tyre industry. But why would a tyre manufacturer invest heavily in manufacturing carbon black instead of simply buying it from specialist producers? Here’s a closer look.
What is carbon black and why is it used in tyre manufacturing?
In its purest form, carbon black is a fine black powder, essentially composed of elemental carbon. It is produced by the incomplete combustion of heavy petroleum products. Heavy petroleum-based oil residues are heated in a furnace under carefully-controlled conditions with limited oxygen supply. Since there isn’t enough oxygen for complete combustion, the oil doesn’t burn completely. Instead, it undergoes partial burning and pyrolysis (a process in which heat breaks down the hydrocarbons into tiny carbon particles).
These particles are then cooled, collected, and processed into the fine black powder known as carbon black. Although it resembles soot, it isn’t: carbon black is a meticulously-engineered industrial material with controlled physical and chemical properties and it is mixed with rubber compounds to improve strength, durability, and wear resistance.
According to the International Carbon Black Association (ICBA), around 90% of the world’s carbon black production is used in rubber applications, like tyres, industrial belts, rubber hoses, etc. While it is mainly used to strengthen rubber in tires, it also serves as a pigment, UV stabiliser, and conductive or insulating agent in a variety of rubber, plastic, ink and coating applications. It also helps tyres disperse heat, enhances traction, and protects the rubber from the wear-and-tear caused by ultraviolet light and ozone exposure (UV rays from the sunlight and atmospheric ozone exposure can cause rubber to break down, dry out, and crack.)
In tyre manufacturing, carbon black is one of the most important raw materials after rubber. Depending on the type of tyre being produced, carbon black can account for roughly 20-30% of the rubber compound by weight, making it a significant component of both the manufacturing process and the overall cost structure.
Most Indian tyre companies source their carbon black from speciality chemicals companies like PCBL Chemical, Phillips Carbon Black, Himadri, and Birla Carbon. BKT, at the moment, is the only company that is manufacturing its own, not just for captive consumption, but also as a supplier to other tyre manufacturers.
Why BKT is moving to in-house manufacturing of carbon black
There are a few reasons why BKT decided to move to in-house manufacturing and focus on vertical integration.
- Ensuring self-sufficiency: Carbon black is one of the most important raw materials used in tyre manufacturing. Producing it in-house reduces BKT’s dependence on external suppliers, ensuring a reliable supply as it expands into new tyre segments such as truck and bus radial (TBR), passenger car radial (PCR) tyres and rubber tracks. This also helps minimise the risk of production disruptions caused by supply chain bottlenecks or shortages.
- Improving cost efficiency: Manufacturing carbon black internally gives BKT greater control over a major input cost. Instead of relying entirely on external suppliers, the company can secure a steady supply at predictable costs while reducing logistics expenses. Over time, this can help improve operating margins as production volumes increase.
- Maintaining quality: Carbon black plays a crucial role in determining a tyre’s strength, durability, heat resistance and wear characteristics. Producing it in-house allows BKT to maintain tighter quality control and tailor carbon black grades to the performance requirements of its specialised off-highway tyres.
- Creating new revenue streams: The Bhuj facility is no longer just a captive raw material plant. Carbon black already contributes around 8% of BKT’s revenue, and the company aims to increase this to nearly 10% by 2030, pointing to how BKT is building it into a standalone business apart from captive supply.
- Sustainability: BKT has stated that its integrated carbon black facility helps reduce transportation-related emissions by eliminating the need to move large quantities of the material from third-party suppliers. The company also recycles Carbon Black Feedstock (CBFS) within its manufacturing process, helping improve resource efficiency and lower the environmental footprint of production.
While BKT itself is a midcap, this investment in the Bhuj plant could have ripple effects beyond the tyre industry. Capacity expansions of this scale may generate fresh demand for companies operating in adjacent segments such as plant engineering, industrial equipment, automation and process technologies.
Why BKT’s carbon black expansion is worth noting
BKT’s latest expansion is about more than increasing carbon black output: it reflects an effort to have more direct control over one of the tyre industry’s most important raw materials, especially as BKT expands its off-highway tyre business and enters adjacent segments like truck and bus radial tyres, passenger car radial tyres and rubber tracks.
The move also illustrates a broader manufacturing strategy: as companies grow larger and production volumes increase, owning more of the supply chain can become a competitive advantage through lower costs and improved quality.
Sources
Auto Components India: BKT Expands Carbon Black Capacity to 360,000 MTPA
The Role of Carbon Black in Tire Manufacturing | Kemipex
What is Carbon Black? | Carbon Black 101