Faced with falling demand for tyres, Birla Tyres, a unit of B.K. Birla group company Kesoram Industries, Wednesday shut down its plant in Orissa's Balasore district.

"We have shut the unit for 15-20 days. We hope the situation will improve a bit and then we can restart production," S.K. Parikh, Kesoram Industries director and company Secretary told IANS in Kolkata.Global economic downturn and its adverse impact on the automobile industry is the main cause for the closure, he said.

Although a senior company official at the Balasore unit said the shutdown will not affect employees and that salaries would be paid, Birla Tyres Worker's Union alleged that more than 2,000 casual and temporary workers have lost their jobs because of the shutdown."We are worried because more than 2,000 casual and temporary workers have become jobless from today," union leader Rajendra Bal told IANS over phone. According to a company official, the unit employed 1,300 contract labourers and 700 casual workers.

Birla Tyres had Saturday issued a notice to employees, saying the plant was being shut down on account of the economic slowdown and falling demand.

The company also said if the economic situation did not improve, there could be further cut in production.Of the permanent 2,200 employees at the unit, 400 are management staff.

The Birla Tyres unit, which was set up to manufacture automobile tyres, tubes and flaps in Balasore district, some 200 km from here, had started commercial production in March 1992.According to the company, the unit has an installed capacity of 1.50 million tyres, tubes and flaps per year. Approximately, 30 percent of its production is exported to 43 countries.