"We are looking at expanding our manufacturing operations to Bangladesh, but a decision on whether it will be a joint venture partner or a wholly-owned venture is yet to be finalised," Satyabrata Ganguly, executive chairman & chief executive officer told media persons at the end of the 53rd annual general meeting of the company here yesterday.
Besides organic growth and expansion, there is a compelling business logic to set up a unit in Bangladesh. As per the current levies and duties, it is cheaper to manufacture automotive batteries in Bangladesh and sell it at home. The Bangladesh market currently has only one major brand Volta which caters to a market size of little over 60,000 units per annum.
"There is hardly any incentive for value addition in India as the duty on lead is the same as levied on finished products," Ganguly said.
Exide, which expects to cross Rs 1,000-crore in sales this fiscal, has earmarked an investment outlay of Rs 60 crore for the current year and between Rs 130 crore and Rs 180 crore over the next few years. A recently "revaluation of assets" exercise by S R Batliboi & Co has fixed the company's value at Rs 524 crore.
EIL, which has developed non-spillable battery for the electric bicycle, is in talks with the Hero Group and Mahindras for supplying the new batteries. EIL's automotive battery division is also testing this range which is expected to be launched soon.
Talks are on with a host of Japanese car manufacturers on technology and research and development (R&D) for manufacturing electric batteries for hybrid cars. An Exide R&D team recently visited Japan and is expected to take up manufacturing work in this area, which is a new line of business (LoB) as far as electric battery technology is concerned.
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"We are planning to address the unorganised sector-dominated rural market for tractor batteries by setting up a network of nodal village agencies," Ganguly said. "We are starting with Haryana and Punjab to be followed by similar initiative in southern India. The rural initiative is called Operation Kissan," he said.
The company's ninth manufacturing unit is coming up in Bawal, Haryana, which is expected to go onstream by 2002-03. The company's automotive battery capacity will be expanded to 7.5 m units which includes scaling up of production capacity at Hosur from 50,000 units at present to 75,000 units.
A new Rs 1.40-crore factory-cum-office unit will be set up in Saltlec, Calcutta, through Exide's 51 per cent subsidiary, Caldyne Automatics Ltd. The plan is to manufacture valve-regulated lead acid(VRLA) battery for telecom applications. Exide posted a sales turnover of Rs 939.69 cr and a net profit of Rs 48.89 cr.