Kesoram Industries Ltd, a diversified BK Birla Group outfit, has committed combined investment worth Rs 485 crore for completing a delayed passenger car tyre project and a new grinding unit, the company officials said on Wednesday.

About Rs 235 crore would be for its “semi-completed” tyre project at its existing Balasore (Odisha) plant.

The company has existing facilities for commercial tyres sold under ‘Birla Tyres’ brandname.

The projects will be part-financed through the recent rights issue proceeds of Rs 416 crore.

Kesoram, which has radial tyre manufacturing for commercial vehicles, plans to start commercial production of passenger car tyres through the project within a year. Tridib Kumar Das, CFO, said that nearly Rs 465 crore had already been spent on the project.

“Another Rs 235 crore should see the tyres rolling out of the plant”, he added.

GRINDING project

The company has earmarked Rs 250 crore for the grinding unit at Sholapur (Maharashtra).

This is the company’s first standalone grinding unit outside its production bases in Karnataka and Andhra Pradesh with a total capacity of 7.2 million tonnes a year.

The new grinding project’s first phase of 1.5 million tonnes would be complete in the next 20 months, said Arvind Kumar Singh, CEO – Business Operations. After the rights issue, its net worth now stands at Rs 996 crore and the total debts at Rs 4,700 crore. The rights issue has also increased the promoters’ stake to 49.28 per cent of the enhanced equity of Rs 109.77 crore, from pre-rights 27.12 per cent.

Posts Rs 100-cr loss

Kesoram, which operationally turned around in FY13, reported a lower loss (before tax) in Q1FY14 at Rs 100 crore against Rs 110 crore in the corresponding quarter of the last year.

The tyre segment posted an EBIDTA of Rs 80 crore against a loss of Rs 20 crore.

Cement division’s EBIDTA, however, dropped to Rs 76 crore (Rs 156 crore) owing to “depressed market situation”.

> jayanta.mallick@thehindu.co.in

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