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Mr P.K. Ruia

Pratim Ranjan Bose

Mysore, Oct. 1 Ruia group’s Falcon Tyres is planning capacity addition for its foray into off-the-road (OTR) tyres and industrial rubber product segments to increase profitability. Falcon currently manufactures two- and three-wheeler tyres under the Dunlop brand name.

The detailed plan for capacity addition is expected to be ready after the ongoing Rs 90-crore capacity augmentation programme for two-, three-wheeler tyres is completed by December. While the location is yet to be finalised, sources say the company might zero in on the existing location at Mysore, depending on availability of additional land.

Falcon was producing roughly 3.5 lakh pieces each of tyres and tubes per month when taken over by the Ruia group in December. Thanks to a series of de-bottlenecking exercises coupled with phased implementation of the ongoing project, the company now produces over 6 lakh pieces each of tyres and tubes.

It expects to produce close to 9 lakh pieces each of tyres and tubes by the end of the third quarter.

This coupled with the expected merger of Monotona Tyres with Falcon will give the company about 28 per cent share of the two- and three-wheeler tyre and tube segment. Acquired at Rs 75 crore, Monotona is a wholly owned subsidiary of the Ruia group producing over 3 lakh tyres and 4.5 lakh tubes.

“We are planning several measures including further capacity augmentation and entry into new product ranges to increase the profitability of Falcon,” company Chairman, Mr P.K. Ruia, told newspersons.

Meanwhile, Falcon is expecting a substantial increase in its profitability beginning fourth quarter of this fiscal. While additional capacities are expected to impact on profits, Falcon is expecting the captive 6-MW cogeneration (husk-steam-coal) — slated to go on stream in November — to be a major profit booster through savings on power cost as well as receivables in the form of subsidies and sale of excess power.

The company has a technology tie-up with Sumitomo for its product range in the two- and three-wheeler segment and has made major inroads in replacement sales.

“During the past two years under the Ruia group, our replacement sales has moved up from a mere 15 per cent to approximately 40 per cent,” said managing director Mr A. Sadasivam.

This coupled with 10 per cent exports has brought down OE (original equipment) sales from as high as 85 per cent to 50 per cent. “In the OE segment we have increased our customer profile, thereby reducing dependence on any particular customer,” he said. The company is aiming further increase in replacement sales to 50 per cent.

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