Eveready to tap China for supplies

It intends to grow the packet tea business under the Greendale umbrella

Eveready Industries India is weighing the option of sourcing raw materials from China for its batteries.

Speaking on the sidelines of the company's annual general meeting, Deepak Khaitan, executive vice-chairman and managing director said, the company could source some its metal and plastic components from China which would result in cost savings.

Earlier, the company was toying with the option of entering the Chinese market by way of acquisition or joint venture. However, Khaitan said, the company has decided not venture into the market with those options any more. Rather, it would look at sourcing options in China.

The company has decided to increase prices of its D-segment batteries from July 1 by 5-6 per cent. Addressing shareholders, Khaitan said, "We will pass on cost increases to consumers."

This would add to the bottomline of the company. The company was expecting a 13-14 per cent growth in batteries, more than the industry growth rate of 12 per cent.

Khaitan also told shareholders that the company would consider an interim dividend at the end of first six months in September.

Eveready was in the process of setting up a greenfiled batter project at Uttaranchal at a cost of Rs 60-65 crore, which would improve cost competitiveness of the business. The plant would have a capacity of 400 million batteries per annum.

The company which was now focused on the FMCG business would grow its packet tea business under the Greendale umbrella. Greendale covers brands like Tez, Jaago, Premium Gold and Classic.

Khaitan said, Greendale would become a major brand in the next three years and would have products other than tea in its portfolio. He said, the roadmap for Greendale had been chalked out and would be finalised over the next 2-3 months. However, the new products would not added in the current financial year.

Khaitan said, the packet tea business at a volume of 6,000 tonne was growing at a compounded annual growth rate (CAGR) of 35 per cent and the company hoped to maintain the growth rate.

Eveready would leverage the distribution channel for its batteries. The company has a family of nearly 4,000 distributors and a team of 1,000 exclusive vans servicing retailer needs.