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BLC eyes retail revenues

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BS Reporters Kolkata
Last Updated : Jan 29 2013 | 1:34 AM IST

The company had also lined up Rs 100 crore for the current fiscal for both organic and inorganic growth plans.

S K Mukherjee, managing director of BLC, explained that retail operations helped to pass on the rising input costs of crude oils to the consumer faster and in a more effective way compared to institutional sales.

The company has raised prices of lubricants and grease variants in the retail segment by 20 per cent in the last six months, said V Narayan Sharma, director of manufacturing of BLC, but gross profit from the division was Rs 19 crore in 2006-07. The total lubricants market in India was around 12 lakh ton, and around two-thirds was the retail market, Sharma said.

BLC would also gear up its research and development initiatives on semi-synthetic and synthetic variants that will increasingly replace mineral-oil based lubricants, Sharma told Business Standard.

The price diffrence between synthetic versus mineral-oil based lubricants was increasingly narrowing, from a ratio of 3:1 earlier to an already 2.5:1 now.

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The company would focus on newer product lines in the area.

"It could fetch higher margins", he added.

As for its institutional business, BLC was increasingly passing on cost rises to clients in phases, Mukherjee said.

Compared to the lubricants and industrial packaging businesses, whose margins suffered on account of rising input costs, the major profit driver for the company in the last two years was its Rs 328 crore logistics infrastructure and services business, with gross profit of Rs 86 crore in 2006-07. The container business has especially grown in the air-cargo segment, Mukherjee said.

BLC was eying opportunities in the South and West for setting up container fright stations (CFS) besides inland container depots in Gujarat and National Capital Region (NCR).

It was working on 100 per cent capacity expansion of its CFS in Chennai over 10 acres by investing Rs 15 crore to add another seven acres. The project was scheduled to be completed by September, 2008.

This apart, BLC was also gearing up to acquire some of the abandoned warehouses in the Kolkata dock area, upgrade infrastructure and build state-of-the-art warehouses.

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First Published: Jul 09 2008 | 12:00 AM IST

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