Apollo Tyres to scale down labour force, cut output

NEW DELHI: Apollo Tyres on Thursday said it will lay off 1,500 contractual and casual labourers in the wake of the economic slowdown. It will also cut production in the near future.

“The process of doing away with flab has begun and we will shed 15% jobs of a total employee strength of about 10,000,” said Apollo Tyres chairman Onkar Kanwar at the annual general meeting of industry body FICCI. “The company is not going to cut permanent jobs but remove contractual and casual labours,” said Mr Kanwar, adding that all plants, barring Premier Tyres’ plant in Kerala are operating at 100% capacity and has no plans to cut production.

Although, the company’s expectation of growth from the current quarter is low, it’s anticipating reasonable growth in top line this fiscal. “While the industry growth is roughly about 11%, we expect a 19% growth in top line. As far as bottom line is concerned, it will be better than last year,” he said.

But he added that margins continue to be under pressure this quarter, as raw material prices have surged almost 40%. Although, commodity prices have plunged, price of rubber continues to remain high.

Source : Economic Times (2/12/2009)