US-based APC, the world's largest manufacturer of uninterruptible power supply (UPS) systems, has signed up Exide Industries Ltd as its global sourcing agent.
Exide is also in talks for technical collaboration with a German company for manufacture of special DIN batteries for European cars and with an American company for manufacture of industrial batteries.
The deals are expected to be finalised within the next six to eight weeks. The tie-up with APC was finalised last week. The US firm has recently set up shop in Bangalore. This was disclosed by the Exide chairman-cum-managing director (CMD) S B Ganguly, at the company's annual general meeting in Calcutta yesterday.
More From This Section
Ganguly said that as a result of the thrust on becoming a global player, the company had set a target of Rs 60 crore worth of exports for the current fiscal.
The initial requirement by APC is around 40,000 batteries, which is expected to increase in the near future. TVS is also sourcing batteries from the company for export of valve-regulated lead acid batteries (VRLA). "We are gearing up to meet their demands," he said.
Meanwhile, Exide yesterday said its net profit for the first quarter ending June 30, 1999 was at Rs 6.5 crore, up 19.49 per cent from Rs 5.44 crore in the same quarter of the previous year. The earnings per share stands at Rs 7.2 against Rs 6 previously.
Sales for the first quarter were at Rs 195 crore, up 17.5 per cent from Rs 166 crore in the same quarter of the previous year. Total expenditure stood at Rs 126 crore compared with Rs 105.61 crore previously.
On the latest Exim policy, which had brought batteries under the open general licence (OGL), Ganguly said that this raises the question of possible import of batteries, but the company was ready to meet the competition. He also said that while the company was open to tying up with overseas battery manufacturers through joint ventures abroad, it was not considering such alliances within India.
"Competition is good for the health of companies," he commented. He pointed out that Exide could beat out foreign competition through its wide distribution network of over 3,000 dealers. He said that while the pressure will be put on price, the importers will be able to score only at the penetration level, but may not be able to sustain it.
Ganguly further said that as the forex usage of Exide was going up, the company had taken certain steps to contain forex outgo. The steps include manufacturing separators at its Chinchwad unit instead of importing them from Japan, and sourcing more lead from Hindustan Zinc instead of importing it.
lPicture on Page 10
The company plans to invest Rs 60 crore to 70 crore in its various units during the current fiscal. Last year, it invested Rs 50 crore for modernising its Hosur factory and Rs 10 crore each at the Chinchwad and Haldia units.
The company had made heavy borrowings to the tune of Rs 375 crore. It has already honoured its repayment obligations to the tune of Rs 91 crore, he said.
Ganguly said that the company was conscious of the potential of e-commerce, where sale of products would be through the web. It has roped in PricewaterhouseCoopers as consultants for implementing the ERP system from SAP.