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Badal Sanyal

KOLKATA, Jan. 3

DUNLOP India Ltd (DIL) is gearing up to play a major role as converter of tyres for other established tyre companies.

The conversion job is being taken up to ensure that the existing installed production facilities at DIL's two factories - at Ambattur in Tamil Nadu and Sahaganj in West Bengal - are fully utilised from day one of re-starting of operations. Incidentally, both factories had ceased production during the last several months owing to resource constraint.

Tyre industry sources have it that DIL has already held a few rounds of discussions with Apollo Tyres and JK Tyres for finalising the conversion modalities so that the branded tyres of these two companies can be produced utilising DIL's existing production facilities. There is also a possibility that DIL may undertake conversion jobs for a few international brands.

A top DIL source told Business Line recently that there was nothing wrong in taking up conversion jobs when the company was facing a resource crunch and was unable to resume production of its own branded tyres. The company might, however, consider manufacturing aero tyres under its own brand name at Sahaganj.

The tyre conversion activity is likely to be continued till the company manages to effect a turnaround through successful implementation of the detailed rehabilitation scheme (DRS), expected to announced soon by the Board for Industrial & Financial Reconstruction (BIFR). The company is still awaiting an approved DRS from BIFR.

It may be noted that DIL was referred to BIFR a few years ago, seeking a suitable DRS. Subsequently, the management began the "holding operation'' at both factories in anticipation that the DRS would be announced by the board within a reasonable time.

Aggrieved by the prolonged delay on the part of BIFR to finalise a scheme, the management had appealed for the intervention of the Appellate Authority of Industrial & Financial Reconstruction (AAIFR), which has since completed hearing on this matter.

It is expected that AAIFR will soon issue an order directing BIFR to implement the DRS being prepared by State Bank of India, the operating agency.

A DIL source indicated that conversion jobs would be taken up initially at the Ambattur factory where about 35,000 pieces of truck tyre could be manufactured utilising the existing facilities. This apart, the plant has capacity to produce tyres for cars and light commercial vehicles. In the second phase, similar conversion jobs may be done at Sahaganj factory.

It is pointed out that prior to beginning of the conversion work at Ambattur unit, all employees will be paid the entire amount of the re-starting wages. Thereafter, the manpower strength there will be reduced from 1,700 to 1,200 through VRS scheme.

An agreement to this effect has already been signed with the employees' union. A similar agreement will be signed with the unions at Sahaganj before the management withdraws the suspension of operation notice at Sahaganj factory, according to sources.

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