Just two years after it was revived after a long shut down, tyre maker Dunlop (India) Ltd will suspend production at its Sahaganj unit in West Bengal citing lack of working capital and drastic fall in demand.

"For the time-being, Dunlop will suspend production at its Sahaganj unit, but there will be no lay-off, no closure or lock-out," a company spokesman told PTI in Kolkata on Monday.

1. The decision, conveyed to the two main trade unions -- Centre of Indian Trade Unions and Indian National Trade Union Congress, will affect 1,202 workers at the tyre and rubber production units, he said.

"We conveyed this decision to the two unions last Saturday that we have been compelled to do this in view of
global meltdown that has hit the tyre and rubber industries and the crisis in our working capital," he said.

Pawan Kumar Ruia had revived Dunlop in October 2006 after acquiring control of the company from the Chhabria Group in December 2005.

The Dunlop spokesman said the unions were informed that the production would be suspended with immediate effect.

"The unions were also told that workers will be given a subsistence allowance at the rate of Rs 2,000 per month till production resumes," he said.

The management has informed the unions that there was an acute shortage of working capital of the company and it was facing a funds crunch.

No formal notice was put up to this effect, however, he said.

The spokesman said that the company was in a revival stage and had been looking for mobilising funds from financial institutions and banks.

"We have been frantically looking for mobilising funds to meet the working capital crisis," the spokesman said.

Meanwhile, there was tension in front of the main gate with workers failing to join shifts. The Trinamool Congress also staged a demonstration to protest the move.