The Hindu Business Line : Ruia group cuts costs to get through slowdown

Kolkata, Nov. 23 Having decided to temporarily suspend production at its Sahagunj facility in West Bengal from November 17 and pay a subsistence allowance of Rs 2,000 a month to its 1,202 workers till production resumes, the Ruia group on Sunday made it clear that it was looking at every opportunity to cut flab in Dunlop and group companies to tide over the economic crisis.

“The salaries of the management staff of Dunlop have also been reduced in the same proportion to workers till production resumes,” the group Chairman, Mr P.K. Ruia, told newspersons at a press conference here on Sunday.

A stringent cost-cutting exercise has been launched in all segments of operations of the company.

VRS at Jessop

This apart, a voluntary retirement scheme has been launched at Jessop & Co – the group’s engineering outfit – to bring down the number of general and administrative staff from 468.

“We have already received 100 applications and the average separation cost is over Rs 2 lakh,” he said, adding that the 750 workers of Jessop are outside the purview of the separation scheme.

A 10 per cent reduction in demand from Toyota and Nissan has forced the group’s rubber-based sealing solutions outfit Schlegel Automotive in the UK to reduce salaries across the board by reducing working days.

While no such measures are required at its India-based two- and three-wheeler tyre making facilities — Falcon Tyres and Monotona — employing approximately 2,000 each, the group has implemented better co-ordination between the two. “Falcon will henceforth handle the sales of Monotona’s produce,” Mr Ruia said.

Acquisition of J J Polymers

“We had already brought down the power cost of Falcon substantially by setting up a 6-MW co-generation facility and have recently acquired J J Polymers, a small tube manufacturing facility close to Falcon’s Mysore facility, at a nominal sum. Apart from having greater control over costs, the acquired facility may in the future act as tube manufacturing hub for Falcon.”

Resumption of production at Sahagunj

On the prospect of early resumption of production at Dunlop’s Sahagunj facility, Mr Ruia said that the company was trying to tie-up a minimum of Rs 70 crore working capital finance and was aiming to resume production at break-even level latest by March 31, 2009.

“We have consulted the factory unions before taking the decision and are looking forward to enter into a pact in this regard at the earliest,” he said, adding that “vested interests” were trying to spoil the company’s move to ensure long-term prospects.

He is scheduled to meet the State Labour Minister in this regard.

Related Stories:
Dunlop’s Sahagunj unit headed for temporary closure
Dunlop Ambattur staff to negotiate final settlement

More Stories on : Outlook | Tyres | Manpower

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
New initiative

Cummins to sell rental biz to Aggreko arm

‘Cos need to redefine biz model to retain competitiveness’

GM assured of smooth India drive with Daewoo

AP Govt urged to rescue Vizag Steel Plant

Ruia group cuts costs to get through slowdown