Kesoram Industries has announced that the company will close production of tyres at its Balasore, Orissa facility to reduce expenditure and cut costs amid tight financial conditions.

B K Birla flagship Kesoram Industries is a leading manufacturer of yarn, tyres and cement and facing low demand from domestic and international market. The ongoing slowdown and liquidity problem are the major reasons cited by the company to halt production at its Orissa facility.

Kesoram Industries said in a filing before BSE, "Looking at the current demand scenario it is inevitable to close down temporarily, the production facilities at Birla Tyres, a unit of the company, at Balasore in Orissa."

Balasore would remain closed from January 19, 2009 till January 31, 2009 and remain operational from February to March 31, 2009 only for 13 days in a month.

Earlier, the company had also announced to close production at the tyre plant from Dec. 17 to Dec. 31, 2008 under the impact of global slowdown. It recorded significant decline in sales for the third quarter leading to drop in revenue.

Shares of company declined 2.1 percent and closed at 125.25 rupees at the Bombay Stock Exchange.