Bajaj Electricals has merged all its overseas operations into itself from the sister-firm Bajaj International, which has now been transformed into an investment company.
As part of a larger reconstruction plan, the Shekhar Bajaj-led firm has also moved all the employees of Bajaj International Pvt Ltd (BIPL) to Bajaj Electricals Ltd (BEL).
"We are restructuring the business for optimising our resources. Under this plan, we have shifted all the businesses of BIPL to BEL. Now, direct exports will be started from BEL," BEL Chairman and MD Shekhar Bajaj told PTI.
BIPL, however, will continue to exist with its "assets" only as an investment company without any trading, he added.
Bajaj's son, Anant Bajaj— who played a key role in BIPL, was recently appointed as BEL's Joint Managing Director.
"We have already transferred the 13 employees of BIPL to BEL. We will gain access to the 50-60 countries that BIPL was exporting products and we will expand our overseas markets even further," Shekhar Bajaj said.
Earlier, BEL did not receive any revenue contribution from exports as most of the goods are outsourced for production and all overseas income went to BIPL's account.
BIPL had earned about Rs 40-50 crore in 2011-12 from exports of a range of 'Bajaj' products like fans, highmasts, poles, towers and lighting solutions to about 50 countries.
"We are expecting Rs 60-70 crore sales from our exports in the current fiscal. We are targetting a total revenue of Rs 3,800 crore in FY'13," Bajaj said.
The company had clocked a revenue of Rs 3,150 crore in 2011-12 compared to Rs 2,765 crore in the previous fiscal.
As part of its agreement that was renewed for three years with effect from April 1, 2010, BEL was getting a royalty of 0.75% from BIPL for the products that were part of its domestic portfolio.
In addition, BIPL was paying a royalty of 0.25% to BEL for the selling products under 'Bajaj' brand that were not included in the domestic portfolio. This arrangement was valid till October 31, 2012.
According to its Annual Report, BEL had received a total of only Rs 14.42 lakh in 2010-11 as royalty from BIPL.
Elaborating the firm's restructuring plan, Bajaj said: "We have brought in all businesses under two broad categories— B2C and B2B divisions. It will help us in reducing our operational costs by a huge extent."
As part of this plan, the B2C division will be headed by Lalit Mehta, while the B2B businesses will be looked after by Pradeep Tandon, he added.
BEL has six business units— engineering and projects, appliances, fans, luminaires, lighting and Morphy Richards.
The shares of BEL were trading 1.59% down at Rs 198 apiece on Bombay Stock Exchange during late afternoon.