Dunlop stops production at West Bengal unit

Mumbai: The Pawan Ruia-controlled Dunlop India has shut its mother plant in Sahagunj, saying the global financial crisis has affected operations of the already ailing unit.

There had been no retrenchment and all 1,172 workers would continue to be on the company's rolls although they would be paid a consolidated wage. The company said the matter has been discussed with workers and the decision has been taken afterwards.

Dunlop said production at the factory has been 'for the time being' due to lack of demand and and shortage of working capital.

While workers have been asked not to come to the factory, the company would pay a monthly subsistence allowance of Rs2,000 to each of its 1,202 workers till the situation normalised and production resumed, a company spokesman said, adding, there won't be any layoffs.

The company, however, did not give a time frame for restarting operations. Commercial production at the Sahaganj unit had resumed in January last year after a five-year closure.

Dunlop has been carrying on operations at the Sahagunj unit in Hooghly district, although at a reduced capacity of 40 tonnes against the normal 130 tonnes, while its Ambattur unit has been closed for long. The product-mix comprised off-the-road tyres and truck tyres.

''The meltdown has affected Dunlop's revival plans and the company would utilise this time to recast production and perhaps change the product-mix,'' a company official said.

The Pawan Ruia Group acquired Dunlop from the Manohar Rajaram Chhabria family in late 2005.

A day after tyre major Dunlop suspended production at its Sahaganj unit in West Bengal, angry workers staged a demonstration and threatened to enter the factory by breaking open the gates.

Workers led by Mamata Banerjee's Trinamool Congress gathered near the gates and raised slogans against company chairman Pawan Kumar Ruia.