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Dunlop may reopen Ambattur unit next week

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Sahagunj factory still awaits power supply from West Bengal utility.

Mr P.K. Ruia
Mr P.K. Ruia

Our Bureau

Kolkata, Oct. 15 Dunlop India plans to resume production at the Ambattur factory in Chennai next week. The fate of the Sahagunj facility, however, is still uncertain as the West Bengal State Electricity Distribution Company Ltd (WBSEDCL) is yet to resume power supply to the unit.

“The power connection to the Ambattur unit resumed on October 14 and we plan to resume production tentatively on October 19,” the Dunlop India Chairman, Mr P. K. Ruia, told Business Line. The company entered into a fresh wage agreement with the 700 employees of the facility almost a month ago.

Ambattur produces cross-ply truck/bus tyres. Production was suspended in the facility for more than a year.

Meanwhile, the long-pending proposal for resuming operations at Sahagunj is in limbo. While the company faults the WBSEDCL for not resuming supplies, the power supplier blames Dunlop for not complying with procedures.

A WBSEDCL official said that according to the prescribed guidelines of the State Electricity Regulatory Authority, power distributors are entitled to accept “confirmed, revolving, irrevocable and non-recourse letter of credit (LC)” for payment of electricity charges. “On the contrary, Dunlop India has offered a conditional LC which may be revoked. We cannot accept the same,” the official said.

Power supply has been a long pending dispute between WBSEDCL and Dunlop. Dunlop surrendered the power connection during its suspension of work between November 2008 and February 2009. In March 2009, the company withdrew the suspension of work and inducted 250 workers out of a total 1,190 for maintenance. It was proposed that production be resumed as soon power supply was resumed.

According to the company, to ensure power supply, Dunlop entered into a pact with WBSEDCL in September to pay dues worth Rs 13.40 crore accrued during the seven years of closure of the Sahagunj facility before being taken over by the Ruia Group at end 2005.

The company previously contested the claim in the court. However, in line with the pact the company finally agreed to pay the amount in instalments over nine years.

(This article was published in the Business Line print edition dated October 16, 2009)
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