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29. August 2006

INDIA: Dunlop tyres likely to roll in September / Production in Ambattur restarts after 8-year break

Source: Daily "The Hindu Business Line", New Delhi; 29 Aug 2006

Chennai , Aug. 28
Quality and consistent production and delivery will be
the key focus areas for Dunlop India Ltd, which
restarted production on Sunday after an eight-year
break.

Dunlop tyres will be on the market shelves in mid-September.

Addressing a press conference after the formal start
of the production at Dunlop's factory in Ambattur
here, the company Chairman, Mr P.K. Ruia, said that
with the job of restarting behind it, quality and
consistency in production will be the key issues to
finding Dunlop's space in the market.

Dunlop tyres will hit the market in mid-September
about 10 days after they roll out in the first week of
September from the Ambattur facility, he said.

Quality ensured

Mr Ruia said that quality would be achieved `whatever
the cost' and as promoter, he would bring in the
required cash to ensure Dunlop's continued production.
The company would breakeven in March 2007, a
prediction, which, he said is based on not just
optimism but a detailed analyses of the markets and
the numbers.

Dunlop is getting back into the fray at the right
time, the demand is growing and the original equipment
manufacturers have evinced interest in placing orders
with the company.

Donin brand

It is only the Dunlop's need to look for an optimal
mix of OEM supplies and after market sales, which
offer better returns that is stopping the company from
committing its entire production to OEMs.

Some exports are also expected and this would be under
the Donin brand, he said.

Funding

Funds to meet liabilities and its future needs have
been tied up, Mr Ruia said. But there are some
`structuring issues' that would soon be solved.

The promoters will chip in with whatever it takes to
continue production till the bank funds start flowing.
As of now, over Rs 1100 million has gone into
restarting the factories at Ambattur and the Sahagunj
factory in Kolkata, he said.

Sahagunj unit


The Sahagunj unit would restart production in October
and by March 2007, he expected it to be operating to
full capacity of 130 tonnes a day. The delay is
primarily because a lot more time is needed for
refurbishing the facility, which is more than 75 years
old. Ambattur is just half that age, he said.

At Ambattur, power connection has been restored and
the arrears of about Rs 25 million-30 million to the
Tamil Nadu Electricity Board has been rephased. New
water lines are being laid and supply would soon
start, he said.


(Syed Rashid Ali, Karachi, Pakistan)

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