Kesoram Ind scouting for partner for loss-making tyres biz

Kesoram Industries Limited, a B K Birla group company, is on the lookout for a partner for its loss-making tyres business, a company official today said.

Kesoram Industries manufactures tyres for buses and trucks under the 'Birla Tyres' brand name and is now planning to enter the passenger car segment.

"We want to enter the passenger car radial tyres business where the margins are high as compared to commercial segment where the volumes are high," whole-time director and CFO of Kesoram Industries Tridib Kr Das said.

There is also a possibility of a demerger of the tyres business from Kesoram, which also manufactures cement and rayon, once the new partner is inducted, Das told reporters after the company's annual general meeting here.

Investment bankers have been appointed to find a partner, he said.

Replying to shareholders, Das said that the cement business has been earning positive EBIDTA (Earnings Before Interest, Taxes, Depreciation and Amortization) margins unlike tyres.

The cement business contributed Rs 2,400 crore to the overall revenue of Rs 4,000 crore of Kesoram in the last fiscal. The balance was from tyres and rayon.

"Kesoram wants to stay focussed on cement, tyres and rayon," he said.

Talking about Kesoram's huge debt of around Rs 3,500 crore, he said that levels could be raised by earning cash profits.

"Last fiscal, a promoter-group company pumped in Rs 312 crore in Kesoram," he said.

"The company is struggling at the moment," he said.