Ruia Acquires Dunlop India and Falcon Tyres

The privately owned Ruia Group has closed a deal to buy Dunlop India Ltd and Falcon Tyres Ltd, from the Dubai-based MR Chhabria group for a reported 2 billion rupees (£25 million).

“An agreement has been reached between Mr Pawan Kumar Ruia and the (Chhabria) Jumbo Group to hand over both Dunlop India and Falcon Tyres,” said H Sandu, a Chhabria group spokesman, confirming the development took place at a meeting in Mumbai.

According to India’s United News Agency, Ruia said the ballpark figure required for revival of the company was around 1.5 billion rupees, although the National Productivity Council projected the package would be around 2.1 billion rupees. He said the liability of Dunlop stood at around 6 billion rupees and negotiations with the staff and the bank will begin shortly.

The Sahagunj and Ambattur factories will be opened shortly and the redevelopment will take around two years.

After visiting the factory with his family members and a group of executives, Ruia told the Business Standard that the condition of the Sahagunj plant was much better than expected. “I think, we could start production soon at the plant,” he said. Ruia said he wanted to restart production in phases.

Most of the production lines, which include rubber pipe and hose production equipment, are reportedly “old”, but the factory also “has a modern conveyor belt line,” the Business Standard reported.

At the last count, the Sahagunj unit had 2,700 employees. Production at the Ambattur factory is expected to restart in six months time.

Apart from the Ruias, Metro Tyres, MRF, Hero Honda, the Caparo Group of Lord Swraj Paul and the Sarda Group were also in the in the running to purchase the assets.

Dunlop says it aims to become a leader in the tyre industry, even if it means getting into alliances with global tyre giants keen on India, said Pawan Ruia at the first media meeting after taking over Dunlop. According to the Business Standard, the Sumitomo name was mentioned as one such company.