Eveready in talks for China battery venture

Eveready Industries India is in talks with Chinese battery companies for a joint venture.

Deepak Khaitan, executive vice-chairman and managing director, said the deal was expected to materialise within three-six months.

Khaitan said the company was in talks with two-three companies and it would be a joint venture where Eveready would possibly be a minority partner.

He, however, refused to comment on the capacity it would add or the investment that would go into the venture. Typically, a greenfield project of the size would cost $15 million.

If the deal is clinched, Eveready plans to export batteries from the Chinese plant to other countries under the brandname of Lava, which was the export brand for its own batteries.

Khaitan said the Chinese battery had its own brand but, the rights to the brand were restricted to China.

Earlier addressing shareholders, Khaitan said that on his recent visits to China, he discovered that the country was producing some quality batteries.

Eveready's other focus area would be the original equipment manufacturer (OEM) segment, where the company was producing batteries for other brands.

Khaitan said the markets that the company penetrated with the OEMs were Chile, Australia, US and Hong Kong. The company was also looking at importing high-end rechargeable batteries.

In line with its growth plans, Eveready was looking at adding capacity at its Kolkata plant. The company would add capacity for 200 million batteries from the current 80 million batteries.

Khaitan refused to divulge the investment, but said the capacity enhancement would be complete by end of next year and the additional investment was a reflection of his bullishness on the outlook for West Bengal. The capacity addition would be funded by supplier credit.

There were also plans for the packet tea and bulk tea business. Khaitan said the company was committed to its bulk tea business and would consider expanding its production base at an appropriate time. Khaitan said, packet tea business had grown by 50 per cent last year.

Eveready has formed a core team to evaluate the possibility of adding more products to its fast moving consumer goods portfolio, which would add to its top line.