The Hindu Business Line : Dunlop to get tyres from overseas markets for domestic sale

Kolkata, Aug. 20 Dunlop India Ltd plans to source high tonnage OTR (off the road) and truck-bus radial tyres from international markets for sale in India.

The tyres will be sold under the company’s brand name. The company has also started test marketing the Sumitomo passenger car radials in India.

This is in addition to the sale of lower tonnage OTRs, cross-ply truck bus tyres and industrial products manufactured by Dunlop’s Sahagunj facility in West Bengal.

According to Mr P. K. Ruia, Dunlop currently manufactures 50 tonnes of tyre and rubber products a day at Sahagunj. Of the total production, about 30 per cent (14-15 tonnes) is OTR tyres supplied mainly to Coal India Ltd. About 5 per cent (2-3 tonne) is for industrial products such as V-belt, hose and others. Nearly 65 per cent of total production is attributed to truck-bus tyres sold only in the replacement market.

“We are facing technical problems in stabilising the production at Sahagunj beyond 50 tonnes a day. Until the problem is over, we cannot go for the slated capacity expansion,” he told newspersons after the company’s AGM here.

“However, in the meantime, we are exploring opportunities to enhance our presence in the Indian tyre market by sourcing the product range which is currently not manufactured by us. As a trial run, we will shortly import 10-15 containers of high tonnage OTRs and truck-bus radials,” Mr Ruia added without disclosing any details on the country or manufacturer of the slated imports.

Captive power plant

Mr P.K Ruia said the profit margin has improved from 2.5 per cent to 5 per cent.

To further reduce the cost of production, the company is planning a Rs 50-60 crore investment for setting up a dual-fuel captive plant, capable of using coal and rice husk as feedstock.

“We are currently paying Rs 75-80 lakh a month to the State electricity board as the energy bill. This apart, the plant uses coal in its 40-tonne steam plant.

“The captive power unit will club the steam and power production facilities, leaving substantial positive impact on the bottomline.”

Meanwhile, production is suspended at the company’s Ambattur facility, in Tamil Nadu, due to higher cost structure.

According to Mr Ruia, the company does not have any immediate plan to resume production at the Ambattur facility until production is stabilised at Sahagunj.

The group has recently acquired 60 acres near Guwahati to set up a greenfield OTR and truck-bus tyre facility.

The project will be getting 30 per cent capital subsidy and excise benefits offered to North Eastern States.

Related Stories:
Dunlop's Sahagunj unit may resume next week
Dunlop suspends work at Ambattur factory

More Stories on : Outsourcing | Tyres

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