After making several unsuccessful attempts to revive the Sahaganj plant in West Bengal, Pawan Kumar Ruia is now shifting focus to Dunlop's Tamil Nadu unit. While the beleaguered tyre maker is fighting a wind-up petition from unsecured creditors in Calcutta High court, Ruia is penning down a restructuring plan for ailing Ambattur factory to keep the company afloat.
The plan envisages replacing the existing workforce at Ambattur with a new and smaller group, managed by the management team of group company, Falcon Tyres.
“We are doing only rubber mixing operation, not making tyres at Ambattur. We will start from the beginning with a new and smaller workforce. We are giving offer to the workers that if they want I will pay them off. It will be part of Dunlop, but can be mangaed by the management team of Falcon which has a plant in Mysore,” Pawan Ruia, Chairman of the Kolkata-based Ruia group that owns Dunlop India, told Business Standard.
In the long-run, Ruia said, there would be a 'common management team' to look after the tyre busines of different group companies like -- Dunlop, Falcon and Monotona Tyres.
According to Ruia the company has already initiated talks with labourers in the plant and the Tamil Nadu government. “We are discussing the issues with workers. We are keeping the the Tamil Nadu government also in the loop, as it is a labour issue. The responses have been positive. In two months time, we hope to settle this issue,” he added. There are about 500 workers at Ambattur plant of Dunlop, which has a production capacity of 90 tonne a day, equal to that of Sahaganj in the Hooghly district of West Bengal.
“The Ruia group is certainly going to be in tyre. Sahaganj is the only plant in eastern India. Unfortunately we are not operational here. Concentration in the South is going to be very strong because of Falcon and Dunlop,” Ruia noted. Ruia group's Falcon Tyres, which has its production capacity at Mysore, manufactures two and three-wheeler tyres. The products however are marketed under the Dunlop brand in Indian market.
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This is of significance that Ruia talks of restructuring the Ambattur plant at a time when his 'final effort' to reopen the Sahaganj plant is yet to yield any result.
After the Sahaganj plant had gone under suspension of work on October 8 for the third time since Pawan Kumar Ruia's acquisition of Dunlop in 2005 from the Manohar Rajaram Chhabria’s Jumbo group, the management announced to lift the suspension of work at its Sahaganj plant in 'a phased manner' as part of his 'last attempt' to revive the plant.
The Dunlop management wanted to engage the plant in the production of the industrial products (IP) in the first phase, which would be followed by production of OTR (large tyres). This means, the withdrawal of stop-work notice offered by Ruia, would have helped 50-70 engineers of industrial product division of total of about 800 employees to get back their jobs in the first go, as they were supposed to be engaged in repairing work.
But, the dead-lock still continues in the plant as the phase-wise withdrawal of the suspension of work failed to appease the workers. The trade unions as well as the state government has been demanding an unconditional withdrawal of suspension of work notice with all 800 workers.
However, Ruia is confident about rejuvenating the the Ambattur plant as he claims, unions and state government there are more “practical”.
When asked about his plan for the Bengal plant, he said, “Practically I am not doing any business here now. People say, I should have left Kolkata, as of yesterday. But, I am still hopeful to reopen Sahaganj. As of now it is wait and watch.”
Meanwhile, Dunlop is fighting a wind-up petition from unsecured creditors in the Calcutta High court. The petition seeking the liquidation of the company was launched by a Kerala-based partnership firm EV Mathai and Sons.
Replying to a query on the same, Ruia said, “I want the units to be operational, if it happens that will sort all issues. Anyway, I will pay off the liabilities. About 21-22 people have joined the petition, the total principal amount will be about Rs 47 crore. I am contesting the petition. We will follow court orders.”
According to regulatory filings, out of Dunlop's total indebtedness of Rs 338 crore on September end, Dunlop had unsecured loans of Rs 286.77 crore. However, Ruia claimed a substantial portion of the unsecured loan is from his group companies.