MUMBAI: The American conglomerate GE today announced launch of a state-of-the-art validation laboratory in Bangalore which will support repair and calibration of Kaye range of products designed to meet industrial requirements.
The lab which has a capability to calibrate temperatures to an accuracy of 0.005° C will meet vital requirements of pharmaceutical and life science industries, a company statement said here.
GE's measurement and control business is a leading innovator in sensor-based measurement, inspection, asset condition monitoring, controls and radiation measurement solutions to a wide range of industries including oil and gas, power generation, aerospace, transportation and healthcare.
"The new lab supports GE's 'In Country, for Country' strategy to build on capabilities and resources within India," GE regional general manager for measurement and control division Ashish Bhandari said.
The lab will also help reduce turnaround time for customers from three months to just one week, he said.
Success in my Habit
Tuesday, March 13, 2012
Varroc to acquire US-based Visteon Lighting for $75-100 mn
MUMBAI: Aurangabad-based privately-owned Varroc Group today announced signing of a deal with US-based Visteon Corporation to acquire the latter's global lighting business for USD 75-100 million (about Rs 500 crore).
"We have signed a deal with Visteon Corporation, a global automotive components maker, to acquire its global lighting business for USD 75-100 million. The deal will include acquisition of six manufacturing operations employing over 4,000 people which includes an engineering centre with over 400 engineers located in low cost countries like Mexico and Czech Republic," Varroc Group's majority shareholder and Chief Executive Tarang Jain told PTI here.
The company is expected to raise funds required for acquisition through private equity, Jain said.
The two companies expect to complete the deal in the third quarter 2012.
With this acquisition Varroc Group will become the largest Indian automotive lighting manufacturer and it will be amongst the top three component manufacturers in the automotive industry in the country, the company claimed.
Varroc Group provides components for two-three and four-wheel passenger and commercial vehicles and has 26 plants, of which 20 are in India, five in Europe and two in Southeast Asia employing around 5,000 people.
The acquisition is a major step in our vision of achieving USD 4 billion revenues by 2020 against USD 613 million in FY 12. Our annual revenues will be close to Rs 6,000 crore with this acquisition, Jain said.
The acquisition will also help Varroc to enter into global automotive exterior market for 4 wheelers. The company presently has strong presence in two wheeler lighting business, Verroc's president of electric division Vineet Sahni said.
"We have signed a deal with Visteon Corporation, a global automotive components maker, to acquire its global lighting business for USD 75-100 million. The deal will include acquisition of six manufacturing operations employing over 4,000 people which includes an engineering centre with over 400 engineers located in low cost countries like Mexico and Czech Republic," Varroc Group's majority shareholder and Chief Executive Tarang Jain told PTI here.
The company is expected to raise funds required for acquisition through private equity, Jain said.
The two companies expect to complete the deal in the third quarter 2012.
With this acquisition Varroc Group will become the largest Indian automotive lighting manufacturer and it will be amongst the top three component manufacturers in the automotive industry in the country, the company claimed.
Varroc Group provides components for two-three and four-wheel passenger and commercial vehicles and has 26 plants, of which 20 are in India, five in Europe and two in Southeast Asia employing around 5,000 people.
The acquisition is a major step in our vision of achieving USD 4 billion revenues by 2020 against USD 613 million in FY 12. Our annual revenues will be close to Rs 6,000 crore with this acquisition, Jain said.
The acquisition will also help Varroc to enter into global automotive exterior market for 4 wheelers. The company presently has strong presence in two wheeler lighting business, Verroc's president of electric division Vineet Sahni said.
Godrej Appliances eyeing big from BoP segment
MUMBAI: Godrej Appliances, the consumer durables division of the Godrej Group, today said it will focus on the bottom of the pyramid segment, following the success of its lowest-cost refrigerator 'Chotukool'.
"The 'Chotukool' was an experiment to test the bottom of the pyramid market. We are in three states and within a year or so we will have a pan-India rollout. When we rollout nationally, we want to be ready with other products also," Godrej Appliances Chief Operating Officer George Menzes told reporters here.
Dubbed as the cheapest refrigerator in the country with a price tag of just Rs 3,500-3,800, 'Chotukool' is available in Maharashtra, Gujarat and Tamil Nadu at present.
"The Chotukool is a low-cost cooling solution for the bottom of the pyramid (BoP) segment. The biggest learning for us in the 'Chotukool' model is the business channel. We have tied up with self-help groups like Pratham and some organisations which are into empowering women and making them entrepreneurs. We are leveraging such bodies to take the product to the rural customers through these self-help groups," he said.
Menzes further said alongside, they are also helping self-help groups to get financing from microfinance firms. Its an ecosystem where Godrej, self-help groups and micro- financiers come together to form a business model. Godrej has also tied up with India Post, besides embarking on an awareness campaign to educate the customers about the product.
"Right now, we are building an ecosystem to move BoP products through this channel. So we thought of creating a bouquet of products for this segment other than limiting ourselves to Chotukool," he said.
Emphasising that this is not a philanthropic effort but striking a balance between business and social objectives, Menzes said, "as a strategy we want to differentiate Godrej from others by doing something for the BoP segment, because we want to improve the lives of the BoP segment."
"The 'Chotukool' was an experiment to test the bottom of the pyramid market. We are in three states and within a year or so we will have a pan-India rollout. When we rollout nationally, we want to be ready with other products also," Godrej Appliances Chief Operating Officer George Menzes told reporters here.
Dubbed as the cheapest refrigerator in the country with a price tag of just Rs 3,500-3,800, 'Chotukool' is available in Maharashtra, Gujarat and Tamil Nadu at present.
"The Chotukool is a low-cost cooling solution for the bottom of the pyramid (BoP) segment. The biggest learning for us in the 'Chotukool' model is the business channel. We have tied up with self-help groups like Pratham and some organisations which are into empowering women and making them entrepreneurs. We are leveraging such bodies to take the product to the rural customers through these self-help groups," he said.
Menzes further said alongside, they are also helping self-help groups to get financing from microfinance firms. Its an ecosystem where Godrej, self-help groups and micro- financiers come together to form a business model. Godrej has also tied up with India Post, besides embarking on an awareness campaign to educate the customers about the product.
"Right now, we are building an ecosystem to move BoP products through this channel. So we thought of creating a bouquet of products for this segment other than limiting ourselves to Chotukool," he said.
Emphasising that this is not a philanthropic effort but striking a balance between business and social objectives, Menzes said, "as a strategy we want to differentiate Godrej from others by doing something for the BoP segment, because we want to improve the lives of the BoP segment."
Amul to promote environment friendly stoves
AHMEDABAD: The Kaira District Co-operative Milk Producers' Union, better known for its Amul Dairy, will promote energy efficient stoves in rural Gujarat. It tied up with Envirofit India, part of US based tax-exempt corporation to replace traditional chulha with specially designed stoves.
Kaira Union will offer subsidy to its farmer members producing milk for Amul Dairy. Envirofit will market stove that has been designed to reduce smoke, biomass fuel and cooking time. It is claiming to have designed stove that will improve wood combustion. Envirofit is also exploring possibilities of garnering revenues by participating in carbon credit trade by demonstrating savings of woods.
"Women in poor farmer families are dependent on woods to cook meals in unhealthy environment. We have observed that conventional system of burning woods in chulha is affecting women's eyes and lungs adversely. We want them to adopt healthier practices and also save precious woods," said Kaira Union MD Rahul Kumar.
He added that farmers affiliated with Amul will get subsidy worth Rs 200 on purchase of stove priced at Rs 1,900. Kaira Union affiliate charitable trust Tribhovandas Foundation's health workers will demonstrate benefits of stove designed by Envirofit.
Commenting on tie up with Kaira Union, Envirofit India MD Harish Anchan said, "We will be able to spread our network in parts of Gujarat to promote stoves designed for better combustion, which will improve health of women. Rural Indian women and their small children suffer from headache as they inhale smoke and carbon monoxide in kitchen. Even today, half of Indian population cook without LPG and depends on woods and kerosene."
Last week, he visited Anand and Kaira districts in Central Gujarat to establish dialogues with farmers and health workers who will run the campaign in the villages. Envirofit is also designing stoves to suit the different utensils used in parts of the India. It is claiming to have sold three lakh stoves in South India. Anchan stated that health workers would sensitise women about ill effects of traditional chulha.
To begin with, stoves will be sold in 100-200 villages. "Our idea is to create demand for stoves and healthy cooking practices. It will enable the stove makers to produce it locally and reduce costs," said Kumar.
Kaira Union will offer subsidy to its farmer members producing milk for Amul Dairy. Envirofit will market stove that has been designed to reduce smoke, biomass fuel and cooking time. It is claiming to have designed stove that will improve wood combustion. Envirofit is also exploring possibilities of garnering revenues by participating in carbon credit trade by demonstrating savings of woods.
"Women in poor farmer families are dependent on woods to cook meals in unhealthy environment. We have observed that conventional system of burning woods in chulha is affecting women's eyes and lungs adversely. We want them to adopt healthier practices and also save precious woods," said Kaira Union MD Rahul Kumar.
He added that farmers affiliated with Amul will get subsidy worth Rs 200 on purchase of stove priced at Rs 1,900. Kaira Union affiliate charitable trust Tribhovandas Foundation's health workers will demonstrate benefits of stove designed by Envirofit.
Commenting on tie up with Kaira Union, Envirofit India MD Harish Anchan said, "We will be able to spread our network in parts of Gujarat to promote stoves designed for better combustion, which will improve health of women. Rural Indian women and their small children suffer from headache as they inhale smoke and carbon monoxide in kitchen. Even today, half of Indian population cook without LPG and depends on woods and kerosene."
Last week, he visited Anand and Kaira districts in Central Gujarat to establish dialogues with farmers and health workers who will run the campaign in the villages. Envirofit is also designing stoves to suit the different utensils used in parts of the India. It is claiming to have sold three lakh stoves in South India. Anchan stated that health workers would sensitise women about ill effects of traditional chulha.
To begin with, stoves will be sold in 100-200 villages. "Our idea is to create demand for stoves and healthy cooking practices. It will enable the stove makers to produce it locally and reduce costs," said Kumar.
Faltering LG frontloads Indian arm with Koreans; difficult market conditions bite hard
KOLKATA: Early this year, Soon Kwon, the MD and president of LG's India unit summoned the top 30 managers of the company for a video conference to tell them life had become tough for the country's largest consumer durables maker.
Driving profitability, maintaining market share, and improving sales planning would be the key goals for the year, he said as he warned his senior team about a slowing market, growing competition, and difficult macro environment. The LG India boss has followed this up with weekly calls with executives whose sales and profit targets are monitored by him. Kwon has reason to worry.
After nearly two decades in which growth has fluctuated between 20% and 40%, propelling the Korean company to the number one spot in India's Rs 35,000-crore consumer durables market, LG India reported flat sales growth in 2011.
Revenues grew marginally to Rs 16,200 crore from Rs 16,000 crore in the previous year, well short of its annual sales target of Rs 20,000 crore by a considerable margin, primarily because of the poor performance of the mobile business. The company's response has been to tighten control over its Indian operations.
In the recent past, the company has appointed two expatriates, both South Korean nationals, as business heads. SH Park has taken over as director of home entertainment while MJ Jeon has been appointed head of the AC business. The B2B segment already had a Korean boss, DP Kim.
In all, three of the five divisions of the Indian unit have Korean heads, a far cry from the past when locals used to helm most divisions. It's not just at the top where the increased Korean presence is being felt. A senior company executive said close to 50 Korean middle and senior managers were working out of LG India's corporate office in Noida, compared with 10 just two years ago.
He wished to remain anonymous since the company has recently issued an internal email that bans all senior executives from talking to the media, except the company spokesperson. The parent's stepped-up interest is because LG Electronics India is beginning to struggle on multiple fronts.
JAPANESE RIVALS GAIN GROUND
The company has for the first time lost market share in the Rs 9,300-crore AC market, though it maintains a significant lead over its nearest competitor. Air-conditioners account for almost onefourth of the consumer electronics pie. It has been badly battered in the mobile phone market, where its market share in 2011 fell 5 percentage points to 2%.
But it has managed to hold on to its market share in refrigerators, washing machines and microwaves while flitting between the number two and three slots in the flat-panel television market.
LG attributes its subdued growth to an under-performing mobile phone business and a difficult macroeconomic environment due to higher inflation for much of the current fiscal, depreciation of the rupee in the closing months of 2011, and hike in input prices.
Driving profitability, maintaining market share, and improving sales planning would be the key goals for the year, he said as he warned his senior team about a slowing market, growing competition, and difficult macro environment. The LG India boss has followed this up with weekly calls with executives whose sales and profit targets are monitored by him. Kwon has reason to worry.
After nearly two decades in which growth has fluctuated between 20% and 40%, propelling the Korean company to the number one spot in India's Rs 35,000-crore consumer durables market, LG India reported flat sales growth in 2011.
Revenues grew marginally to Rs 16,200 crore from Rs 16,000 crore in the previous year, well short of its annual sales target of Rs 20,000 crore by a considerable margin, primarily because of the poor performance of the mobile business. The company's response has been to tighten control over its Indian operations.
In the recent past, the company has appointed two expatriates, both South Korean nationals, as business heads. SH Park has taken over as director of home entertainment while MJ Jeon has been appointed head of the AC business. The B2B segment already had a Korean boss, DP Kim.
In all, three of the five divisions of the Indian unit have Korean heads, a far cry from the past when locals used to helm most divisions. It's not just at the top where the increased Korean presence is being felt. A senior company executive said close to 50 Korean middle and senior managers were working out of LG India's corporate office in Noida, compared with 10 just two years ago.
He wished to remain anonymous since the company has recently issued an internal email that bans all senior executives from talking to the media, except the company spokesperson. The parent's stepped-up interest is because LG Electronics India is beginning to struggle on multiple fronts.
JAPANESE RIVALS GAIN GROUND
The company has for the first time lost market share in the Rs 9,300-crore AC market, though it maintains a significant lead over its nearest competitor. Air-conditioners account for almost onefourth of the consumer electronics pie. It has been badly battered in the mobile phone market, where its market share in 2011 fell 5 percentage points to 2%.
But it has managed to hold on to its market share in refrigerators, washing machines and microwaves while flitting between the number two and three slots in the flat-panel television market.
LG attributes its subdued growth to an under-performing mobile phone business and a difficult macroeconomic environment due to higher inflation for much of the current fiscal, depreciation of the rupee in the closing months of 2011, and hike in input prices.
Samsonite mulls luggage priced below Rs 2, 000
BANGALORE: Samsonite's president for Asia Pacific and Middle East, Dr Ramesh Tainwala although based in Hong Kong was well aware of India's growing spending appetite.Yet, it was only on a recent family holiday to interior Rajasthan did he realise how rapid this transformation was in smaller Indian cities. He was keen on showing his children a bullock cart but there was none in sight.
"We did not see any farmers ploughing fields. What we saw was a four-wheel drive at most homes, everyone had a mobile phone and many even had iPads," Tainwala says in disbelief. "This base clearly would want luggage and messenger bags too," he adds.
The luggage maker, which was globally listed on the Hong Kong stock exchange in 2011, had for long been focused on offering sophisticated solutions to its consumers at Rs 10, 000 and above in India. With brand American Tourister it addressed the Rs 5, 000 and above price segment but it was only a year back that it made a departure from its premium-focused strategy by playing in the Rs 2, 000-5, 000 price segment as well.
"We are at the stage when we think why stop at the price point of Rs 2, 000," Tainwala, who was in Bangalore this week, says. He estimates the luggage market in India at Rs 5, 000 crore, of which half is catered to by unorganised players.
"People are willing to upgrade to national brands as long as it is a reasonable permium. They are willing to pay 10-15% more," Tainwala says.
Samsonite plans to widen its horizon in India across tier III and tier IV cities because brand AT in the Rs 2000-5000 price point already accounts for 10% of its revenue. The company abbreviated American Tourister into AT for this price segment as it did not want to invest in creating a separate brand.
"VIP Industries was having a honeymoon at this price segment until we entered," he says, adding that Samsonite had overtaken VIP by market share in end 2010.
Earlier, Samsonite's aim was to earn greater share of the wallet of a sophisticated consumer who was trading up. "When you are in a known zone, you become comfortable. But you cannot step down to another price segment with the existing business model," he says.
The company has created an independent vertical for brand AT. While earlier, knowledge of English was a prerequisite to join Samsonite, they found that it was a hindrance when tapping smaller cities.
The company also tweaked its product to suit the market's needs. Since new luggage purchases are typically linked to marriages in smaller cities, the company launched a marraige hamper in Bihar-a red suitcase, beauty case and briefcase for men.
Its luggage was designed to accommodate Indian's need to over pack. It did not focus on the robustness of wheels for brand AT as people do not tend to drag their luggage as much in smaller cities and prefer to lift it, he says.
While the company introduced swipecard locks to offer convenience for the frequent business traveller with Samsonite, even the number lock became a deterrent for the lower end of the market. Since this consumer typically tied a rope around the suitcase, the company launched a belt with lock&key to appeal to this consumer.
"The preception of value is different for the consumer in smaller cities. They typically look for security," Tainwala says.
"We did not see any farmers ploughing fields. What we saw was a four-wheel drive at most homes, everyone had a mobile phone and many even had iPads," Tainwala says in disbelief. "This base clearly would want luggage and messenger bags too," he adds.
The luggage maker, which was globally listed on the Hong Kong stock exchange in 2011, had for long been focused on offering sophisticated solutions to its consumers at Rs 10, 000 and above in India. With brand American Tourister it addressed the Rs 5, 000 and above price segment but it was only a year back that it made a departure from its premium-focused strategy by playing in the Rs 2, 000-5, 000 price segment as well.
"We are at the stage when we think why stop at the price point of Rs 2, 000," Tainwala, who was in Bangalore this week, says. He estimates the luggage market in India at Rs 5, 000 crore, of which half is catered to by unorganised players.
"People are willing to upgrade to national brands as long as it is a reasonable permium. They are willing to pay 10-15% more," Tainwala says.
Samsonite plans to widen its horizon in India across tier III and tier IV cities because brand AT in the Rs 2000-5000 price point already accounts for 10% of its revenue. The company abbreviated American Tourister into AT for this price segment as it did not want to invest in creating a separate brand.
"VIP Industries was having a honeymoon at this price segment until we entered," he says, adding that Samsonite had overtaken VIP by market share in end 2010.
Earlier, Samsonite's aim was to earn greater share of the wallet of a sophisticated consumer who was trading up. "When you are in a known zone, you become comfortable. But you cannot step down to another price segment with the existing business model," he says.
The company has created an independent vertical for brand AT. While earlier, knowledge of English was a prerequisite to join Samsonite, they found that it was a hindrance when tapping smaller cities.
The company also tweaked its product to suit the market's needs. Since new luggage purchases are typically linked to marriages in smaller cities, the company launched a marraige hamper in Bihar-a red suitcase, beauty case and briefcase for men.
Its luggage was designed to accommodate Indian's need to over pack. It did not focus on the robustness of wheels for brand AT as people do not tend to drag their luggage as much in smaller cities and prefer to lift it, he says.
While the company introduced swipecard locks to offer convenience for the frequent business traveller with Samsonite, even the number lock became a deterrent for the lower end of the market. Since this consumer typically tied a rope around the suitcase, the company launched a belt with lock&key to appeal to this consumer.
"The preception of value is different for the consumer in smaller cities. They typically look for security," Tainwala says.
WPIL to acquire pump business of PSV Holding of South Africa
MUMBAI: Pump manufacturer WPIL Ltd today said it will acquire the pump business of South African PSV Holdings Ltd for ZAR (South African Rand) 54 million (about Rs 35 crore) in an all cash deal.
The acquisition will be made through company's Singapore subsidiary WPIL International Pte Ltd and the deal is "subject to carrying out of necessary due diligence," it said in a filing to the BSE.
"With this acquisition, WPIL will be able to expand its reach in the vast developing African pump market," it added.
PSV Holdings Ltd, a listed company based in South Africa, is a specialised industrial engineering group focusing on pumps, spares, valves, engineering linings, industrial supplies, fuel pumps and dispensers and cryogenics.
On the other hand, WPIL is a Kolkata-based company, having presence in various segments of pump business, which are used in water supply, barge pump stations, irrigation, thermal power plants, fire fighting among others.
Shares of the company closed today at Rs 212.40 apiece on the BSE, up 2.88 per cent from the previous close.
The acquisition will be made through company's Singapore subsidiary WPIL International Pte Ltd and the deal is "subject to carrying out of necessary due diligence," it said in a filing to the BSE.
"With this acquisition, WPIL will be able to expand its reach in the vast developing African pump market," it added.
PSV Holdings Ltd, a listed company based in South Africa, is a specialised industrial engineering group focusing on pumps, spares, valves, engineering linings, industrial supplies, fuel pumps and dispensers and cryogenics.
On the other hand, WPIL is a Kolkata-based company, having presence in various segments of pump business, which are used in water supply, barge pump stations, irrigation, thermal power plants, fire fighting among others.
Shares of the company closed today at Rs 212.40 apiece on the BSE, up 2.88 per cent from the previous close.
L&T Finance enters home finance market with Indo Pacific deal
MUMBAI: L&T Finance, the NBFC arm of the engineering giant Larsen & Toubro, today entered into housing finance business with the signing of a definitive agreement to acquire a small-sized housing finance company Indo Pacific Housing Finance (IPHF).
The acquisition, which is subject to regulatory approvals, is likely to help L&T Finance enter into housing finance business by expanding the network of IPHF, the company said in a statement.
"This acquisition will synergize with our existing financial services business by deepening and widening its services. It is our intent to widen the presence of IPHF both geographically and by customer segments," it said, adding that home finance was the logical next step for the NBFC.
It, however, did not disclose the financials of the acquisition and the funding pattern.
According to the company, IPHF had loan book size of Rs 193.5 crore with 34 branches last fiscal, primarily in the Southern and Western regions.
Referring to the acquisition, N Sivaraman, president and whole-time director of L&T Finance said, "With this acquisition, we have taken the first step to go beyond the asset finance orientation into consumer finance domain. We chose the route of acquiring a small, operating business because it brings with a fully functional operating platform with a well experienced team of mortgage experts."
The acquisition, which is subject to regulatory approvals, is likely to help L&T Finance enter into housing finance business by expanding the network of IPHF, the company said in a statement.
"This acquisition will synergize with our existing financial services business by deepening and widening its services. It is our intent to widen the presence of IPHF both geographically and by customer segments," it said, adding that home finance was the logical next step for the NBFC.
It, however, did not disclose the financials of the acquisition and the funding pattern.
According to the company, IPHF had loan book size of Rs 193.5 crore with 34 branches last fiscal, primarily in the Southern and Western regions.
Referring to the acquisition, N Sivaraman, president and whole-time director of L&T Finance said, "With this acquisition, we have taken the first step to go beyond the asset finance orientation into consumer finance domain. We chose the route of acquiring a small, operating business because it brings with a fully functional operating platform with a well experienced team of mortgage experts."
Warburg Pincus & IFC invest $50 million in AU Financiers
BANGALORE: AU Financiers (India) Pvt. Ltd announced on Monday that U.S.-based private equity firm Warburg Pincus and World Bank affiliate International Finance Corp have invested $50 million in the non-banking finance company.
The investment will be primarily used to fund future growth of the Jaipur-based company and will also provide some liquidity to early investors, according to a press statement released by AU Financiers.
IFC, which is an existing investor in the company, will maintain its current stake, post-infusion. However, the statement did not disclose the stake picked up by Warburg Pincus.
"The current round led by Warburg Pincus is the single largest equity infusion in the company which would double our net worth," Sanjay Agarwal, founder and managing director, AU Financiers was quoted as saying.
The company, which also counts Motilal Oswal as one of its institutional investors, has also made a concerted foray in to the housing finance market, largely in Rajasthan and a few other markets where it has a presence.
In a previous round of equity funding in 2010, AU Financiers had reportedly raised Rs 55 crore from IFC and Motilal Oswal's India Business Excellence Fund (IBEF).
Global consultancy major Ernst & Young was the sole financial advisor for the transaction.
The investment will be primarily used to fund future growth of the Jaipur-based company and will also provide some liquidity to early investors, according to a press statement released by AU Financiers.
IFC, which is an existing investor in the company, will maintain its current stake, post-infusion. However, the statement did not disclose the stake picked up by Warburg Pincus.
"The current round led by Warburg Pincus is the single largest equity infusion in the company which would double our net worth," Sanjay Agarwal, founder and managing director, AU Financiers was quoted as saying.
The company, which also counts Motilal Oswal as one of its institutional investors, has also made a concerted foray in to the housing finance market, largely in Rajasthan and a few other markets where it has a presence.
In a previous round of equity funding in 2010, AU Financiers had reportedly raised Rs 55 crore from IFC and Motilal Oswal's India Business Excellence Fund (IBEF).
Global consultancy major Ernst & Young was the sole financial advisor for the transaction.
Falcon Tyres to operate Dunlop India's Ambattur plant
CHENNAI: Tyre maker Dunlop India, which has suspended operations at its Ambattur unit here due to labour unrest, today said it plans to restructure the facility under associate company Falcon Tyres after settlement of the dispute.
"We are looking at an early settlement of the discordant issues with workers of the Ambattur plant. It will be followed by a thorough restructuring of operations at the plant, which includes laying off some employees," Dunlop management sources said in an email to PTI.
The Kolkata-based Ruia group promoted Dunlop India assured there would be no effect on employees' motivation under the new management.
Dunlop India said if the the plant has to run profitably and operations made sustainable, the workforce would have to downsized. "The new workforce will function under a new management system under Falcon Tyres", it said.
Asked if the company had adopted a wrong strategy to handle labour issues,the company admitted that restructuring and downsizing of employees should have been completed in October 2009 itself, ahead of its plant's reopening.
The company reopened the Ambattur plant in the third week of October, 2009, after reaching a settlement with the labourers in July, 2009.
"The plant is capable of producing truck and bus tyres and when it reopened (in October 2009) the management planned an early resumption of manufacturing of these products. The workers assured us of cooperation in lowering cost of production. But the assurance remained only on paper," the company said.
Noting that operations at the Chennai plant are now being outsourced,it said they are keen on utilising the plant's full potential and not the loss caused due to the labour unrest.
The company attributed the "increasing indiscipline" of the workers forced the management to suspend all operations.
"We are looking at an early settlement of the discordant issues with workers of the Ambattur plant. It will be followed by a thorough restructuring of operations at the plant, which includes laying off some employees," Dunlop management sources said in an email to PTI.
The Kolkata-based Ruia group promoted Dunlop India assured there would be no effect on employees' motivation under the new management.
Dunlop India said if the the plant has to run profitably and operations made sustainable, the workforce would have to downsized. "The new workforce will function under a new management system under Falcon Tyres", it said.
Asked if the company had adopted a wrong strategy to handle labour issues,the company admitted that restructuring and downsizing of employees should have been completed in October 2009 itself, ahead of its plant's reopening.
The company reopened the Ambattur plant in the third week of October, 2009, after reaching a settlement with the labourers in July, 2009.
"The plant is capable of producing truck and bus tyres and when it reopened (in October 2009) the management planned an early resumption of manufacturing of these products. The workers assured us of cooperation in lowering cost of production. But the assurance remained only on paper," the company said.
Noting that operations at the Chennai plant are now being outsourced,it said they are keen on utilising the plant's full potential and not the loss caused due to the labour unrest.
The company attributed the "increasing indiscipline" of the workers forced the management to suspend all operations.
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