Kesoram Industries is taking steps to restructure its tyre business, which is running into losses. Kesoram, the flagship of the B K Birla group, is making a push to separate the two core businesses- cement and tyres- into two distinct entities.
For a few years, Kesoram has been making endeavours to attract a strategic partner for the tyre business. Now, to expedite the procedure, it has decided to hive off the tyre trade. Two European and Southeast Asian firms have shown interest in recent years. There are also several other global companies looking for “ready tyre capacity” in India.
Manjushree Khaitan, who became chairman of Kesoram recently after the death of B K Birla, stated that details will be disclosed after the demerger is completed. Located in Balasore, the tyre business provides tyres for commercial vehicles and two and three-wheelers.
Shareholders are pleased to hear of the imminent split, as it will prevent the cement sector from cross-subsidizing the tyre sector. Birla Tyres still needs `6-7 billion to compensate for losses, increase production and consummate a passenger radial venture which it began seven years ago.
