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10. April 2006

INDIA: Falcon Tyres to spend Rs 700-800 m to ramp up capacity

Source: Daily "The Hindu Business Line", New Delhi; 10 Apr 2006

Kolkata , April 9
Falcon Tyres may clock a record profit growth in
2005-06. According to sources, the company has
embarked upon a Rs 700-800 million second phase of
expansion to ramp up capacities to 750,000 pieces of
two- and three-wheeler tyres and tubes a month. The
expansion programme will be implemented latest by
December 2006.

After coming under the control of the Ruia Group three
months ago, the company has enhanced the production of
tyre and tubes by 30 per cent to 550,000 pieces and
350,000 pieces respectively by implementing a capacity
de-bottlenecking scheme at a cost of Rs 120 million.
The company was earlier producing 275,000 pieces of
tubes and 435,000 pieces of tyres.

Falcon Tyres' profitability has declined steadily in
the last three years. The company registered a net
profit of Rs 9.2 million in 2004-05 against Rs 16
million in 2003-04 and Rs 51.9 million in 2002-03.

However, the company recorded a net profit of Rs 22
million during the first three quarters this fiscal.
The first quarter is so far the most benefiting
period, recording a net profit of Rs 11.7 million.

Thanks to increased production and productivity, the
company's profitability has been the highest in the
fourth quarter.

A company spokesperson said that Falcon Tyres has
registered a healthy growth so far in this fiscal and
it is expected to continue with the industry trend.



(Syed Rashid Ali, Karachi, Pakistan)

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