Dunlop India May Close Factory if Power Not Reconnected

The supply of electricity to Dunlop India’s factory in Sahaganj is still disconnected, and company chairman Pawan Kumar Ruia has threatened to close the plant if the power is not restored during the first half of August. The chairman indicates that Dunlop India is ready to resolve the matter with the West Bengal State Electricity Distribution Company out of court.

The factory’s electricity supply was severed earlier in the year due to the non-payment of dues amounting to Rs 130 million (£1.66 million), and the company claims responsibility for this lies with the previous owner. “The electricity dues got accumulated much before we took over the company. We do not know why the electricity connection was not disconnected when the dues remained unpaid for five years before we took-over. We heard lot of people ran business taking illegal connection from Sahaganj unit,” Ruia stated.

According to Ruia, Dunlop is spending Rs 30 million (£382,000) to keep the Sahaganj unit open. He warned, however, that it is “not possible to sustain this for long if we cannot start production. The hearing on the case was concluded on July 15. The lower court is likely to deliver the judgement on July 27 or 27.

“We are now waiting for the judgement. If it goes against us then we shall definitely appeal in High Court. But we cannot wait indefinitely without power connection. I have set a timeline of 15 days for this,” Ruia added.

The Dunlop chairman hinted the company may consider the option of setting up a greenfield factory if the problems in Sahaganj and at its Ambattur unit continue. However, he expressed hope that operations at Ambattur will recommence during August.