The Hindu Business Line : Maruti rejigs vendor base due to MRF labour issues

New Delhi/Chennai, July 1 Labour issues at MRF’s production unit in Tamil Nadu is forcing Maruti Suzuki to increase its sourcing from other tyre makers.

Maruti Suzuki is now meeting its requirement by buying more tyres from J K Tyres, which is its largest supplier.

“We have been sourcing from different companies such as MRF, JK and Apollo. But we are increasing our sourcing from companies especially JK,” Mr S. Maitra, Managing Executive Officer, Supply Chain, told Business Line.

Currently, JK Tyres is the largest vendor of Maruti Suzuki. It accounts for 40 per cent of the company’s requirements annually. MRF supplies about 30 per cent of volumes for Suzuki.

MRF has been facing labour issues at its Puducherry and Arakonam plant since May. MRF’s Arakonam unit was under lock-out between May 17 and 27, 2009. This plant makes tyres for two-wheeler manufacturers such as Hero Honda and passenger car manufacturers such as Maruti.

The other plant at Puducherry, which makes radial tyres for passenger cars, was also under lock out from May 17 and was reopened little later.

However, the plant is still not fully operational due to issues related to some section of workforce. This is leading to the company not being able to meet the full requirement of Maruti. The radial tyres supplied by MRF are mainly for models such as Swift and Dzire, which already has a waiting period.

“We have not been able to meet the full requirement. But production has resumed at our plant since a week. It will take time for us to ramp up production to the earlier level. Equipment will need time. So in a few days we will be able to decide the time-frame by when production will reach the normal level,” said Mr Koshy Varghese, Executive Vice-President at MRF.

Even as the company has started production, it has still not been able to settle issues and discussions are still going on.

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