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12. October 2006

INDIA: Dunlop spends Rs 1500 million in modernisation of plants

Source: Daily "The Hindu Business Line", New Delhi; 12 Oct 2006

Set to resume production at its Sahagunj facility this
month, Dunlop India has already spent Rs 150 crore
towards modernisation of both of its facilities and
meeting past liabilities.

The Sahagunj facility will produce its usual line of
cross-ply tyres including off-the-road (OTR) tyres and
industrial products.

Confirming that Sahagunj will resume production in
October, the company's Chairman, Mr P.K. Ruia, said
that the expenses incurred so far were from the
group's internal accruals. "We are expecting disbursal
of the first tranche of term-loan finance worth Rs 100
crore in this week," he said.

The company has already received sanctions worth close
to Rs 350 crore from a consortium of foreign banks and
financial agencies.

On the Ambattur facility, which resumed production in
August, he said that the production from the plant was
fast stabilising.

While the company's produce has already hit the
replacement market in South India, Tata Motors is
currently testing Dunlop truck-bus tyres for meeting
original equipment requirement.

Expecting production of Sahagunj and Ambattur to
stabilise at 130 tonnes each by the end of this
fiscal, Mr Ruia finds scope of technical
collaborations - for manufacturing radial tyres - in
2007-08.

The group is currently working out a collaboration
agreement with Sumitomo for Falcon Tyres.

The draft agreement is more or less finalised except
for some differences on the exclusivity clause.

"We are expecting the agreement to be finalised in two
next weeks," Mr Ruia said.


Note: one crore=10 million

(Syed Rashid Ali, Karachi, Pakistan)

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