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Rediff News  All News  » Business » Modi Tyre revives JV with German firm

Modi Tyre revives JV with German firm

November 06, 2008 09:48 IST

Modi Tyre Company, a subsidiary of V K Modi-controlled Modi Rubber, has revived its technical and branding joint venture agreement with Germany-based Continental Tyres.

The company has invested about Rs 300 crore (Rs 3 billion) for resuming production at the Modinagar plant near Meerut.

The earlier tie-up with Continental, which is the world's fourth-largest tyre producing company, had lapsed after the closure of the plant in 2001. Labour unrest and litigations had led to the closure of the unit then.

The tyres manufactured under the agreement would be marketed under the Continental brand. Prior to the closure, the company's tyres were being co-branded as Modi Continental. The new JV, like the previous one, is only technical in nature and does not involve any investment from the German tyre company.

Since Continental has a technical collaboration with Indian tyre companies such as JK Tyre Industries and Metro Tyres, Modi Rubber was required to secure a no-objection certificate from such companies under the provisions of Press Note 1.

"The NoC has been obtained from the companies and submitted to the project approval board for approval," company sources said.

The PAB approval is likely to come in a month, following which the commercial production of tyres would start. Initially, the company would be manufacturing 1.1 million truck tyres and tubes annually.

The repair, upgradation and computerisation work in the plant has been completed and the company has put its raw material and marketing network back in place to start production.

Prior to 2001, Modi Rubber was a leading tyre company with a market share of more than 14 per cent.

Ajay Modi in Kolkata