The Hindu Business Line : Dunlop's Ambattur unit restarts production

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Chennai Jan. 25 Dunlop India Ltd's factory at Ambattur has restarted production from Tuesday, according to Mr P.K. Ruia, Chairman, Dunlop.

The major issues that needed to be addressed — - power supply, labour and funding — have all been dealt with and the factory will sustain production in the long term, he said.

It will start with 27 tonnes production a day and increase it over the next two-three months in stages to 90 tonnes and finally, to its full capacity of 130 tonnes, he said.

The unit will produce truck and tractor tyres. Some tyres have been supplied to the local markets in Chennai and Kolkata. Product approval for OEM supplies will come later, he said.

Though the issue of power supply is in court, for now the Tamil Nadu Electricity Board has started supply on the orders of the Madras High Court, Mr Ruia said.

It may be recalled that in November 2006, Dunlop stopped production after power supply was cut for non-payment of dues. The company had felt that the power charges were high and went to court.

On the labour front, the company has sought a reduction in workforce through an `early retirement scheme', which would be open through January. The management has agreed to make the payments one month later.

According to sources, of the 1,100-odd workers, 775 are in manufacturing. The management wants the other 300-odd workers to opt for the Early Retirement Scheme.

Mr Ruia said banks have sanctioned over Rs 600 crore and expressed confidence that the funds would come through. Until Dunlop gets the funds, the company will be able to maintain production on its own strength once the products hit the market. Mr Ruia said that Dunlop's two-wheeler and three-wheeler tyres were being received well in the market. These are produced at the Falcon Tyre unit in Karnataka, which has a capacity to make about 5.5 lakh tyres a month. The company has also decided to merge Monotona Tyres, the Mumbai-based two-wheeler and three-wheeler tyre manufacturer, with Falcon Tyres. Monotona has a capacity to produce 2.75 lakh tyres a month, he said.