Dunlop to resume production at Shahgunj plant in May

Tyre maker Dunlop India Ltd is likely to resume production at its Sahaganj plant next month, if power is restored.

"The Sahaganj plant is waiting for electricity connection to restart production," Dunlop India Ltd chairman P K Ruia told PTI.

Power has to be restored by the West Bengal State Electricity Development Ltd that was surrendered when production was suspended at the plant in November last year.

Asked whether resumption of production had any link to the Lok Sabha elections, Ruia side-stepped the question saying that the situation was favourable to begin production.

Production was discontinued since November 30, citing the global financial crisis and recessionary pressure.

The problem of power restoration, however, was yet to be resolved.

When Dunlop asked for reconnection of power, WBSEDCL insisted on withdrawal of all pending cases filed by Dunlop between 1999 and 2005 and before the change of management.

Dunlop officials did not speak about arrangement of working capital, but sources said the need for working capital now would be much less at Rs 14-15 crore (Rs 140-150 million) against Rs 50 crore (Rs 500 million) when the plant was shut down.

The reason for low working capital was due to scaling down of production to 30 tonne per day, while price of rubber had been reduced by around 40 per cent during the period.

Dunlop had reopened partially on March 6 with around 200 of the 1,147 workers for maintenance of the plant.