The Hindu : Business : New revamp scheme for Dunlop

Online edition of India's National Newspaper
Tuesday, Sep 27, 2005

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Business

New revamp scheme for Dunlop

Special Correspondent

It now has Rs. 66 cr. in its kitty through asset sales; reopening of units left pending

KOLKATA: Dunlop India Ltd (DIL) has decided to re-examine the draft rehabilitation scheme (DRS) of 2002 and submit it before the Appellate Authority for Industrial and Financial Reconstruction for its hearing in the first week of October. The company was declared sick in June 1998.

Stating this before the shareholders at the 78th annual general meeting, DIL director, Pramode Balakrishnan, said several business parameters of the DRS-2002 have changed in three years.

The volatility in the price of the prime raw material, rubber, and the demand-supply situation in the domestic tyre market merit a relook at the DRS, he said. Aspects which will be reviewed are: revamp of the plant and machinery at Sahagunj in West Bengal and Ambattur in Tamil Nadu, implementation of best industry practices, logistics and distribution infrastructure. The units have remained closed since 2001.

Fresh business plans

Mr. Balakrishnan, who chaired Monday meeting said the National Productivity Council would shortly submit its report recommending a suitable business plan for restarting operations.

The DRS update would rivet on this report, he said.

Referring to the Ambattur factory, he said although agreements were renewed with the workers' union in the last fiscal year, in the absence of an approved DRS, little could be done to commence operations although the requisite funds were available.

Dunlop India now has Rs. 66.90 crore in its kitty through asset sales and as directed by the AAIFR it deploys this fund for one-time settlements with banks and its creditors. The company's interest burden had been considerably reduced through this method.

Industry under pressure

However, the tyre industry continued to be under pressure with increasing prices of rubber, fabric and carbon black.

Alongside it faced the threat of imports. For DIL management, this translated into further difficult conditions, to tackle which the management might have to drastically prune its workforce, Mr. Balakrishnan said.

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