Kolkata’s Ruia Group to set up tyre plant in Guwahati

By Aparajita Gupta, IANS,

Kolkata : The Kolkata-based Ruia Group, on an acquisition spree over the past few years, is setting up a Rs.4 billion greenfield tyre plant in Assam, company chairman Pawan Kumar Ruia said here.

Support TwoCircles

The plant will come up in an industrial area being constructed by the Assam government near the Lokpriya Gopinath Bordoloi International airport in Guwahati.

“We will invest Rs.4 billion for this project, which is likely to be completed within a year and a half,” Ruia said in an interview with IANS.

The company has already acquired a 60-acre plot for constructing the plant, which would have a production capacity of 50 tonne units per day initially. Later, the capacity would be increased to 100 tonnes per day.

The project report has already been completed, he added.

Asked what prompted him to venture to the northeast, Ruia said: “The government is supportive. The market is also extremely good over there. And since my company is headquartered in Kolkata, doing business in the northeast is advantageous for me.”

He predicted a lot of investment in the northeast from various companies across several sectors in the next five to 10 years, with power being the thrust area.

“I am very bullish on the northeast,” he added.

Turning to the group’s overall plans in the next two years, Ruia said around Rs.22-23 billion would be pumped in for organic growth.

It would invest Rs.8 billion in sugar, Rs.10-12 billion in tyre and Rs.3-4 billion for heavy engineering and infrastructure.

The group is already building a Rs.8-billion sugar complex at Shariyatpur in East Champaran district of Bihar. The project would include 10,000 tonne cane crushing capacity per day, an ethanol manufacturing unit with a daily capacity of 240 kilolitres and a 50 megawatt power plant.

The complex, set to be completed in two years, is coming up on 180 acres, of which 102 acres has been acquired so far, he said.

“We are trying to catch next season, that is, 2009-10,” Ruia said.

Besides, the group already has a sugar plant – the Kamlapur Sugar and Industries Ltd in Uttar Pradesh – which has a daily capacity of crushing 4,000 tonne of cane.

Ruia acquired sick heavy engineering and infrastructure company Jessop and Co. in 2003 and turned it into a profit-making business. Ruia plans to invest Rs.3-4 billion for brownfield expansion of Jessop in the next couple of years.

The group ventured into tyre industries in 2005 with the acquisition of Dunlop India Ltd and Falcon Tyres Ltd. In 2007, it acquired Monotona Tyres in Mumbai and in the same year bought a controlling stake in electronics company Industronics Berhad in Malaysia.

“We will increase the production capacity of Falcon Tyres to 150-200 tonne per day. This will require an investment of Rs.5-6 billion,” Ruia said.

Falcon Tyres currently produces 100 tonne units per day. The total production for a month stands at 750,000 pieces of tyres and the same number of tubes.

At Dunlop, the focus would be more on radial tyre and off-the-road (OTR) tyre variety this year, Ruia said.

This year, the group acquired British auto component company Schlegel Automotive Europe Ltd.

“I love to take risks and challenges. I am fond of creating values in areas and companies where others think there is no value,” he said.

Acquisition, ownership or partnership with foreign companies would help the group imbibe their technological know-how, which would prove extremely beneficial for business growth, he said.

After acquiring Schlegel Automotive, manufacturer and supplier of auto components to some of the major auto companies in the world, the company has received at least 10 proposals from various overseas companies located in the US and Europe including the UK, Ruia said.

The turnover of the group as a whole was Rs.15 billion last fiscal. In the current fiscal it is expected to touch Rs.20 billion.