The Hindu Business Line : Dunlop spends Rs 150 cr in modernisation of plants

Set to resume production at its Sahagunj facility this month, Dunlop India has already spent Rs 150 crore towards modernisation of both of its facilities and meeting past liabilities.

The Sahagunj facility will produce its usual line of cross-ply tyres including off-the-road (OTR) tyres and industrial products.

Confirming that Sahagunj will resume production in October, the company's Chairman, Mr P.K. Ruia, told Business Line that the expenses incurred so far were from the group's internal accruals. "We are expecting disbursal of the first tranche of term-loan finance worth Rs 100 crore in this week," he said.

The company has already received sanctions worth close to Rs 350 crore from a consortium of foreign banks and financial agencies.

On the Ambattur facility, which resumed production in August, he said that the production from the plant was fast stabilising.

While the company's produce has already hit the replacement market in South India, Tata Motors is currently testing Dunlop truck-bus tyres for meeting original equipment requirement.

Expecting production of Sahagunj and Ambattur to stabilise at 130 tonnes each by the end of this fiscal, Mr Ruia finds scope of technical collaborations - for manufacturing radial tyres - in 2007-08.

The group is currently working out a collaboration agreement with Sumitomo for Falcon Tyres.

The draft agreement is more or less finalised except for some differences on the exclusivity clause.

"We are expecting the agreement to be finalised in two next weeks," Mr Ruia said.

Jessop IPO

During the past fortnight, Mr Ruia has had discussions with merchant bankers in India and abroad about the possibility of public issue of Jessop & Co.

However, according to sources, the management may backtrack on the issue due to pricing considerations. According to sources, the current valuation of Jessop does not justify any such issue at a price of more than Rs 3-4 per share (Jessop had already reduced its face value per share from Rs 10 to Re 1), which did not find much favour from the promoters.