Dunlop buys UK's 2nd largest auto component co Schlegel

By Sulakshna Mukherjee and Samidha Sharma, CNBC-TV18

After the acquisition of Jaguar by Tata, Ruia-owned Dunlop India has also bought a British company. It has bought UK’s second largest auto component manufacturing company Schlegel. Interestingly, this deal makes Schlegel, the erstwhile parent of Dunlop, Dunlop's subsidiary.

It was three years ago that the Ruias acquired the ailing Dunlop factory to venture into the tyre industry. And now it has entered the auto components market with the takeover of British company Schlegel Automotive.

But this takeover has resulted in a twist of fate. One of Schlegel's subsidiary is the British Tyre Rubber, or BTR, which was the erstwhile parent company for Dunlop worldwide. Now, BTR has been reduced to a subsidiary.

“When we took over this company, we went back to Schlegel as an original name. And this particular company also has a subsidiary by the name of BTR. At one particular time, BTR owned Dunlop Worldwide although now it is a Shell company. But now we think, there is emotional value to this particular company when it is coming with that actually," said Pawan Ruia, Chairman, Ruia Group.

The Ruias’ latest acquisition - Schlegel - supplies rubber sealings to auto majors like Ford, Toyotas and BMWs. The company is all set to start a manufacturing unit in India under the banner Schlegel Automotive India.

“We found a huge shortage of this particular product in India as a right quality product. And since the auto sector is growing, we analyzed that if we take over this company and bring that company to India, the technology will come in, and which will be there to the growing demand of the Indian auto industry,” said Pawan Ruia, Chairman, Ruia Group.

The Ruia Group will invest close to Rs 70 crore to expand its operations in India. Though the location has not been finalized yet, the plant will start its production in a year's time.