Fire to affect output at Ceat plant

The shares of Mumbai-based tyre manufacturer Ceat dipped nearly five per cent on the BSE, after a fire broke out on Sunday at its Bhandup plant disrupting production.

The cause of the fire or the extent of the damage to the raw materials’ store inside the plant is yet to be ascertained. The fire did not spread to the main plant that produces tyres and was restricted to the materials store, said a spokesperson of Ceat.

"The manufacturing activities at the plant have been temporarily suspended and will be resumed at the earliest,” a company statement said. The Bhandup plant makes cross-ply tyres.

ALSO READ: Fire at CEAT plant pulls down stock by 5%

Sources said the production was expected to remain affected over the next couple of days. Ceat's Nashik plant is the only other plant that makes cross-ply tyres, while the Halol plant in Gujarat makes radial tyres.

ALSO READ: FIIs up their stake in Ceat by 8% in Q3, stock surges 200%

The Bhandup unit, located in a suburb of Mumbai, is the oldest manufacturing unit of Ceat. Its current capacity is 250 metric tonnes a day. It is also less efficient due to its age than the factory in Gujarat, which is the latest. The Nashik unit is expected to make for the loss in production.

The plant was operating at 80 per cent utilisation before the fire. The fire, which broke out at around 5.30 pm on Sunday, was extinguished within a few hours by the fire department. No loss of life was reported.

"The fire was contained with prompt action of the fire department. There has been no loss of life and damage to the main plant and machinery. The management is extending its complete support and cooperating with the authorities to find the cause of the fire," added the company.

Yaresh Kothari, research analyst, automobile, Angel Broking, said, "The company said they had insured the raw materials. If they restart production in two-three days then there won’t be much of an impact.”