Date:24/06/2007 URL: http://www.thehindubusinessline.com/2007/06/24/stories/2007062401520200.htm

Back Dunlop's Sahagunj unit may resume next week

Pratim Ranjan Bose

Trials runs already on; plant ready for 50-tonne capacity

Back on track
Production suspended in May to renovate plant and machinery
Company plans recruitments from old staff for capacity enhancing plan
Private placement of 14.5 per stake in Dunlop to foreign lenders likely to be firmed up

Kolkata June 23 After a month-long shutdown, the Sahagunj facility of Dunlop India is set to resume commercial production — with 60 per cent higher capacity — in early next week.

According to the Chairman, Mr P.K. Ruia, the facility is now ready for production of 50 tonnes of off-the-road tyres and select industrial products. The company has already resumed trial runs in the refurbished facility.

Dunlop Sahagunj resumed commercial production after almost eight years of closure in October 2006, soon after its takeover by Mr Ruia. Between October 2006 and April 2006, the plant was operational at around 30-tonne capacity.

According to the company management, production was suspended in May to refurbish the plant and machinery to increase production capacity to 50 tonnes.

"Though we initially planned a gradual enhancement of capacity, the condition of the plant and machinery were found in need of fresh repairs. The plant is now ready for 50-tonne production and is expected to produce up to 90 tonnes in the next few months," Mr Ruia told Business Line.

Good news

The resumption of production will also bring good news for the old Dunlop employees. Following its tripartite agreement with the labour unions on June 5, 2006, the company is planning to make 300-330 fresh recruitments from the old employees — as early as next week — to support its enhanced production plan. Dunlop has already absorbed 630 old employees and the fresh recruitments would take the total to over 900.

According to Mr Ruia, capacity enhancement drive is also under way in the company truck tyre manufacturing facility at Ambattur in Tamil Nadu. The facility is currently shut. "We will bring it back on stream after Sahagunj," he added.

According to Mr Ruia, employees at both the Sahagunj and Ambattur facilities continued receiving their salaries and wages during the shutdown. Meanwhile, the company is planning to firm up private placement of 14.5 per cent stake in Dunlop India to foreign lenders for raising $80-90 million.

Falcon Tyre, another Ruia outfit is, in the meantime, nearing completion of its capacity expansion drive from 5.5 lakh to 7.5 lakh tyres. This is the second capacity expansion by the company following takeover by Mr Ruia.

De-bottlenecking and refurbishment exercise is also under way at the Monotona Tyre facility in Maharashtra. Mr Ruia acquired the company from the Dipak Poddar group earlier this year. The company is slated to be merged with Falcon.