Exide Industries plans to spend upwards of Rs 400 crore on capacity augmentation this fiscal in an effort to meet spiralling demand from the domestic market. The Kolkata-based battery-maker expects to invest in expanding production in existing plants as well as executing a greenfield project in Ahmednagar.
“We have had difficulties in meeting demand from the market. We plan to increase two-wheeler battery making capacity by 60 per cent and SLI (automotive) battery capacity by 28 per cent,” Exide India CEO and managing director TV Ramanathan said here on the sidelines of the company's annual general meeting.
“At Ahmednagar, we will spend not less than Rs 80 crore, while the remaining amount will be spread across other facilites,” he added.
The funds for the expansion will be drawn out of the Rs 540 crore corpus, which was mopped up by the firm through a qualified institutional placement (QIP) earlier this year.
At present, the company has manufacturing facilities in Shyamnagar, Bawal, Taloja, Chinchwad, Hosur and Haldia. In India, according to the firm's website, it has a market share of 45 per cent in industrial batteries, along with a 72 per cent and 73 per cent share in the automotive original equipment and replacement automotive segments, respectively.
Concurrently, with volatility of lead prices — a major constituent in batteries — persisting, Exide India is looking to source as much as 70 per cent of the metal from its subsidiary lead smelting and refining subsidiaries in the next couple of years.
Exide India owns 100 per cent and 51 per cent stake, respectively, in smelting and refining firms Chloride Metals Ltd and Leadage Alloys India Ltd, and may look at merging the two firms to save costs, its Chairman RG Kapadia said.
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Last fiscal, about 42 per of Exide India's lead requirement was met through subsidiary smelters, compared to only 24 per cent in the previous year.
“We are open to both organic and inorganic opportunities to increase our (internal) smelting capacity,” Ramanathan said.
Meanwhile, exports are also likely to look up this fiscal, Ramanathan said, though the quantum would depend on the capacity addition and the demand from the domestic market. About 10 per cent of Exide India's industrial batteries are exported, while only 2 per cent of automotive batteries are shipped overseas.