Balmer Lawrie in spread mode

Public sector conglomerate Balmer Lawrie Company (BLC) is drawing up plans to expand its core businesses within the country and abroad. The privatisation of BLC appears to have been put on the backburner for now.

BLC has diverse businesses like cargo and logistics, grease and lubricants, tours and travels, industrial packaging.

While the company is looking at setting up grease manufacturing base in countries like Bangladesh and Indonesia, it is planning to expand its logistics business by adding more container freight stations (CFS) within the country.

"The domestic market for grease and lubricants has matured and no spectacular growth is expected given that automobile and industrial engines are becoming more fuel efficient. Thus it is important that the company ventures into virgin markets like Bangladesh and Indonesia where no grease production units exist," sources said. BLC would not be averse to joint ventures to set up facilities abroad.

BLC is the largest producer of grease in the country with a capacity of 80,000 tonne per annum (TPA). The company is also looking at expanding the profitable cargo and logistics business. It has three CFS at Kolkata, Chennai and JNPT in Mumbai.

BLC is likely to tap opportunities in Jalandhar and Kanpur.

The company will fund the capital expenditure through a mix of internal accruals (the company has Rs 159 crore as reserves) and debt. BLC may also raise the required fund by issuing fresh equity, the sources said.

On the issue of disinvestment, sources said that the Union ministry of petroleum and natural gas has not officially stated that BLC will not be sold off/disinvested.

"Unless there is clear direction from the government, BLC cannot pursue future plans. Going by the state of things, it may take another two to three months before steps are taken on disinvestment," sources added.

Owing to the uncertainty over disinvestment, several critical programmes have been stalled. Notable among them is the induction of strategic partners for non-core businesses like leather performance chemicals and tea blending export.

BLC, a subsidiary of IBP, was demerged when government decided to divest stake in IBP. Post-demerger, Balmer Lawrie Investment Ltd (BLIL) became the new holding company for BLC.

BLIL was set up as a shell company to facilitate the sale of BLC. Along with the BLC divestment, the government will have to decide the fate of BLIL.