Modi Rubber Cuts Output By 10 Per Cent

Modi Rubber Ltd (MRL) of the B K Modi group has slashed production by 10 per cent following steady inventory pile up and failure of sales projections during 1996-97.

The demand for tyres, particularly car tyres, touched a new low since the beginning of the last quarter of the year.

The tyre industry is expected to record lower sales following a slump in the demand for automobiles this year.

Almost all other tyre companies are believed to have slowed down their production lines too. However, none of them confirm this.

MRL chairman B K Modi said the company has decided to keep its plants shut on Sundays to cut production.

Since domestic demand for tyres is static, Modi said MRL was exploring exports to minimise inventory build-up.

The rate of growth of automobiles, which was estimated to increase to 15 per cent in the current fiscal from an 8 per cent rise recorded a year ago, has in fact dropped to 6 per cent in the year so far.

The main factor that has pulled down the growth of the automobile sector, is the passenger car segment with hardly an appreciable growth seen for the new cars that hit the roads during the year.

While most tyre companies have returned poor results for the first half of the financial year 1996-97, tyre manufacturers have had mixed fortunes this fiscal.

But fortunately, natural rubber prices have maintained a steady trend throughout the year.