Dunlop India Resumes Production

Tyres are reportedly rolling off the Dunlop production line in Sahagunj, India, for the first time since 2001. The factory, located in the state of Bengal, is initially focusing on manufacturing Earthmover tyres, although the production of other types of tyre should commence before mid 2007. The workforce at Sahagunj numbered 473 the day work resumed, but this number should increase to about 1,200 during the coming months.

The Ruia Group purchased the debt-ridden Dunlop India Ltd from the Chhabria family-controlled Jumbo group in December 2005. Dunlop India chairman Pawan Kumar Ruia, a man with a strong reputation for having the Midas touch with ailing businesses in India, has stated that the company plans to have a turnover of 13,000 million rupees (£150 million) during the 2007-2008 fiscal year, with 60 to 65 per cent of this turnover being generated by the Sahagunj factory.

Dunlop has also received clearance from the Board for Industrial and Financial Reconstruction (BIFR) for re-listing its shares on the Bombay stock exchange, an important step for Ruia as he was reliant upon the assistance of a foreign venture capitalist when buying Dunlop. Earlier attempts to re-list the company had failed as the BIFR had not granted their permission.

Dunlop is reportedly in negotiations with two foreign companies, including one based in the UK, to discuss the introduction of radial technology to Dunlop India’s plants. Whether this will be introduced into the Sahagunj factory or at a greenfield site has not been determined. The company has also entered discussions with Tata Motors Limited, with a view to supplying tyres to their plant in Pune.