Modi Rubber Clawing its Way Back After Long Hiatus

After six idle years the Modi Rubber tyre factory in Modipuram, near the northern Indian city of Meerut, may soon again be a hive of tyre making activity. On August 20 local officials handed over the factory’s keys to the Modi Rubber managing director, Vinay Kumar Modi, and following this transaction Mr. Modi gave instructions for the plant and equipment to be made ready for use.

The managing director has high hopes that the Modi Rubber factory will soon be producing Modi Continental truck tyres. “It will happen in the next four to six months,” he told India’s Business Standard newspaper. In the near future Mr. Modi will commence negotiations with the German tyre major in the hope of re-establishing technical collaboration. Modi first produced Continental branded tyres in 1974.

Before the Modi Rubber facility became mired in financial difficulties and closed its doors in 2001, the company is said to have held around 14 per cent of the domestic market. However, after more than half a decade of inactivity the company can only call upon 1,200 of its original 4,000 employees, so before tyre production can begin again in earnest Modi must hire and train new personnel. Neglected links with dealers must also be re-forged. Despite these obstacles, Mr. Modi is optimistic that, once India’s Board for Industrial and Financial Reconstruction gives the go-ahead for tyre production to resume, the company could realise profits during the first year of operations if the factory achieves 50 to 60 per cent capacity.