Additional delay for Birla Tyres’ pcr project expected
In its results for the quarter ending 31 March 2012, India’s Kesoram Industries reported pushing back the completion date for its Birla Tyres passenger car radial and truck and bus tyre radial projects, but now the pcr capacity expansion project may face further delays. The IANS news service reports comments made by Birla Tyres CEO Arvind Singh on the sidelines of the company’s Annual General Meeting; Singh told journalists that Birla has “not yet decided” when the passenger car project – which through a Rs 7.5 billion (£87.1 million) investment would have given its Balasore plant a daily pcr capacity of 80 tonnes – will be commissioned. “We are considering the present market conditions,” he said.
“Last year was not good for tyre industry itself and we did not do that well either,” he added. “These are the reasons why we are still not sure by when will we actually commission it.” Singh described the second and third quarters of the 2011-12 financial year, which ended 31 March 2012, as the company’s “worst”, and noted that losses in the final quarter – which amounted to Rs 1.34 billion (£15.6 million) – were only half as large.
Singh’s comments regarding a revised timeframe for the Balasore project allowed room for confusion, however: While IANS reported the CEO as saying “it would be wrong to say that we have put it on hold” and that Birla is “assessing the equations every month to see how we can work this out,” the Business Standard quoted Singh as telling journalists that “the project is in limbo.” Further comments from Singh carried by the financial daily were that “the tyre business is clearly not the star of the show and this decision is in view of the market perspective.”
Singh said Birla Tyres’ current focus was on utilising the full capacity of its existing truck, bus, two-wheeler and three-wheeler tyre units. No significant comment was made on the 85 tonne per day truck and bus radial expansion project at the company’s Uttarakhand plant, which is expected to be complete in the second half of the 2012-13 financial year.