India's leading white goods company, BPL Ltd has decided to embark on a series of measures to unlock the inherent value of its group businesses by roping in joint venture partners, exit certain businesses and develop additional revenue streams.
"We are evaluating selective divestment opportunities for non-strategic businesses," BPL Ltd chairman and managing director Ajit G Nambiar told Business Standard in a free-wheeling interview.
For example, the company plans to bring in a strategic partner in the soft energy business. This will unlock approximately Rs 100 crore of investments made by BPL Limited in this business.
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However, the BPL Group will continue to hold controlling interest in each one of its businesses.
The company plans to unlock value by bringing in strategic partners in select businesses through equity participation and via co-branding measures.
The objective of the entire exercise will be two-fold. By roping in joint venture partners, it will help raise funds for its growth activities, and at the same time by aligning itself with global players, it will have access to their know-how and best international practices.
In its core businesses itself, the company has decided to identify certain businesses from which it will exit. Certain partnerships could also eventually turn into joint ventures.. BPL's core businesses include, consumer electronics, home appliances, soft energy and medical systems (health care).
Nambiar said the group will extend the scope of each of its core businesses to expand growth opportunities which include, multimedia, convergence solutions, digital products, home networking solutions.
He said BPL will also focus on developing significant revenue streams in the following areas.
These are:
1 Third party design and development services. BPL has a strong in house Design and Development capability and is in a position to provide design solutions beginning from product concept to design of solutions, industrial design and manufacturing.
2 IT and networking solutions: We are at the forefront of the drive to offer network solutions for next generation IT products and Home Appliances.
3 System and solution provider for next generation multimedia products.
4 Third party (OEM manufacturing of a range of products): By leveraging its large scale integrated manufacturing capacities.
Nambiar said BPL is on target with its scheduled restructuring exercise. It has streamlined itself to centre on four business areas : Entertainment Electronics, Home Appliances, Soft Energy & Health Care.
"The aim of the company's effort is to structure its capital which goes beyond improving financial fundamentals. We see it as a way to promote strategic alliances with the world's leading companies to help us secure world-class competitiveness," Nambiar said.
BPL's success is due to its joint venture approach, stemming from a longstanding tradition of valuing a partnership based on a win-win strategy. The Company has successfully formed strategic partnerships with Sanyo, Toshiba, Denon of Japan and Loewe of Germany, Nambiar said.
Nambiar said an internal reorganisation of the functions of each business head has also been carried out. Each Strategic Business Unit is now headed by a Chief Operating Officer with end to end responsibility for the respective businesses.This has been carried out to help achieve balanced allocation of resources.
The manufacturing, marketing, finance and after sales service have been integrated under the COOs.