Closure of Dunlop unit is unfortunate, says Mrinal

KOLKATA: Dec 02, 2008- The closure of Dunlop India Ltd's Sahaganj unit has come as a surpirse to the West Bengal government as it did not get any prior indication that the company was moving towards that direction.

State labour minister Mrinal Banerjee after a meeting with government officials on the Dunlop issue told reporters that the declaration of suspension of work by the Dunlop management was sudden and "the state is taken aback by the unfortunate decision."Dunlop India declared suspension of work on November 30 following its declaration of suspension of production just 13 days before.

According to company spokesman Dhrubajyoti Nandy, although Dunlop intended to only suspend production "for the time being" remitting Rs 2000 per month to each of its 1200 workers as aid substituting remuneration, both the CITU and INTUC-led labour unions did not sign an agreement agreeing to the company's terms. The unions were supposed to sign the agreement on November 24. "Hence we have decided to go for a suspension of work for an indefinite period and workers will be deprived of the supporting aid that we were willing to give," Nandy said.

Dipankar Roy and Bijon Kanti Sarkar, CITU and INTUC leaders, respectively, in Sahaganj said they were willing to sign the agreement to protect the interest of workers but a section of them had not allowed the unions to do that.

"By signing the agreement we could have prevented the immediate suspension of work and got time to negotiate with the management. But for a section of workers that could not happen," Roy said.Banerjee, who had a meeting with the minister of state for labour, Anadi Sahu, and chief minister's principal secretary Subesh Das, said: "We will soon talk to Dunlop officials and union leaders and try to find a solution.

"We will also try to implement the recently ammended industrial dispute Act to solve the Dunlop clousre issue," Banerjee said. Pawan Ruia controlled Ruia group took over Dunlop India from the Chhabarias in 2005 with a promise to revamp the closed units in Sahaganj and Ambattur.

Although Ruia had said the Sahaganj unit would run at 130 tonne capacity per day within one-one and a half years from the commencement of production, the unit never produced beyond a capacity of 40 tonne a day. Production at Sahaganj was actually halted since September, and Ruia waited for an opportunity to declare closure.

However, the financial downturn came as an opportunity for Ruia to declare suspension of production and thereafter suspension of work. The financial downturn, however, did not affect the Indian mining sector, to which the major chunk of Sahaganj's production, off the road tyres (OTRs), are meant.

According to Dunlop officials, owing to lack of market for Dunlop-brand OTRs, production was curtailed. Overhead costs (salaries not exceeding Rs 6 crore per month) too had mounted pressure on the working capital.

Dunlop chairman Pawan Ruia has put March 31 as the deadline to commence production at Sahaganj once again. Officials, however, said that the management was eager to re-start production in January itself, if it could arrange for a working capital of Rs 100 crore. Ruia, while announcing the suspension of work, had said that Rs 300 crore working capital would be needed to resume production.