The Hindu Business Line : Ruia Group may expand Dunlop's truck tyre manufacturing capacity

AFTER having acquired Dunlop, the Ruia Group is now considering the expansion of the company's truck tyre manufacturing capacities at both Sahagunj and Ambattur. In fact, the group is hopeful of opening the tyre and industrial products division of Sahagunj at one go.

Talking to Business Line, the group Chairman, Mr P.K. Ruia, said that Dunlop had a total capacity of producing close to 75,000 truck tyres a month at both the facilities.

Of the two, Ambattur has the larger capacity of 40,000 tyres a month. This is against a total market size of over nine lakh tyres a month, 70 per cent of which is provided by three players.

Ambattur can turn into an original equipment hub for the company due to its proximity to the commercial vehicle manufacturing sector in south India. "Together, Falcon and Ambattur are equipped to cater to almost the entire demand for tyres, except the demand for car tyres in south India," he said.

While Sahagunj will largely focus on the growing replacement market for the truck, construction vehicle and tractor tyre sector in eastern India, the plant's industrial products division is expected to be the money-spinner.

Sahagunj has the unique distinction of producing a wide range of rubber and tyre products.

While the lack of a radial tyre range puts it at a disadvantage compared to other players in the car sector, Mr Ruia believes that the company is technologically on a par with the rest of the industry in other sectors.

"While we are about to appoint a consultant for conducting a feasibility study, as things stand, Sahagunj will be reopened much sooner than we expected," he said.

Liabilities: According to him, the greatest concern for reopening Sahagunj is the settlement of claims and liabilities on sales tax, electricity and employees' dues.

While trade unions and employees have shown their eagerness to help revive the company, a preliminary look at the sales tax liabilities indicates that out of a total of Rs 214 crore, as much as Rs 211 crore is contingent liability.

"If we do not have to take care of the contingent liability, we can commence operations early," he said, adding that his company would discuss issues relating to sales tax and electricity dues (Rs 40 crore) very soon.

The maintenance of plant and machinery, due for five years, will begin this week and will take approximately four weeks to complete.

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