The Hindu Business Line : Falcon Tyres to spend Rs 70-80 cr to ramp up capacity

Falcon Tyres may clock a record profit growth in 2005-06. According to sources, the company has embarked upon a Rs 70-80-crore second phase of expansion to ramp up capacities to 7.5 lakh pieces of two- and three-wheeler tyres and tubes a month. The expansion programme will be implemented latest by December 2006.

After coming under the control of the Ruia Group three months ago, the company has enhanced the production of tyre and tubes by 30 per cent to 5.5 lakh pieces and 3.5 lakh pieces respectively by implementing a capacity de-bottlenecking scheme at a cost of Rs 12 crore. The company was earlier producing 2.75 lakh pieces of tubes and 4.35 lakh pieces of tyres.

Falcon Tyres' profitability has declined steadily in the last three years. The company registered a net profit of Rs 92 lakh in 2004-05 against Rs 1.6 crore in 2003-04 and Rs 5.19 crore in 2002-03.

However, the company recorded a net profit of Rs 2.2 crore during the first three quarters this fiscal. The first quarter is so far the most benefiting period, recording a net profit of Rs 1.17 crore.

Thanks to increased production and productivity, the company's profitability has been the highest in the fourth quarter.

A company spokesperson said that Falcon Tyres has registered a healthy growth so far in this fiscal and it is expected to continue with the industry trend.

Related Stories:
Falcon Tyres' board, management recast