Birla to combat financial pressures with expansion, management restructuring

After ending the 2010-11 financial year with a net loss of Rs 2.1 billion (£29.1 million), India’s Kesoram Industries has announced its intention to restructure the management of its Birla Tyres business unit and increase its focus on passenger car and two-wheeler tyre production. In a statement, Kesoram director (and daughter of company head Basant Kumar Birla) Manjushree Khaitan said “the company is hopeful of rebounding this year as it is in the process of putting in a recovery plan in place which includes among other things a strong management team for the tyre division, higher capacity utilisation, a more aggressive marketing policy and a change in the product mix towards high margin passenger car and two-wheeler tyres.”

According to reports, the tyre maker intends to increase truck and bus radial production by 85 tonnes per day at is Laksar-Haridwar plant and passenger car radial production at its Balasore facility by 80 tonnes per day in the months leading up to September. These capacity expansions will be achieved through respective Rs 3.5 billion (£48.5 million) and Rs 4.5 billion (£62.4 million) investments. Total Birla production will then reach 988 tonnes per day.

Management restructuring is considered necessary to improve the company’s profitability, Khaitan added. “The process has already started and we are now looking at appointing a chief executive officer, for which head hunters have already been put into service.”