The demerger of Balmer Lawrie & Co Ltd (BLCL) from IBP Co Ltd, its holding company which owns a 61.8 per cent stake in the former, is likely to be completed before December.
Members of the Company Law Board are scheduled to meet in November for an approval to the process. A separate company, Balmer Lawrie Finance Ltd (BLFL), has been formed to transfer the shares of IBP for the demerger.
Meanwhile, in a bid to streamline its business in its non-core, profit-making businesses such as leather chemicals, travels and tours, container freight station and tea export, the company will be tying up with third parties with expertise and proven track record in the field.
"The initial tie-up will be strategic ones which can then be transformed into a equity stake if we see enough opportunity," said P K Bishnoi, managing director, Balmer Lawrie.
"The whole process of finding out and tying up strategic partners is expected to be complete by 2003," Bishnoi said.
Citing examples, Bishnoi added, "The company was a leader in synthetic fat liquor but its presence in synthetic oil and chemical segments were small. The company will try and find partners who will help us develop our markets in the field where we are not strong. This will involve technical tie-ups and product alliances."
The company is looking for a foreign partner for its tourism sector. An alliance with a foreign strategic partner will help BLCL procure foreign orders and vice versa. For its tea business, BLCL will also enter into talks with Indian tea manufacturers and merchants.
Although Bishnoi declined to name the institutions the company has entered into talks with, he said the process was on and the hunt for strategic joint venture partners had made some progress.
For its core business, a major restructuring process is on. This involves stringent cost-cutting measures and rationalisation of assets, products and services and a better logistic management.
Rationalisation of products will involve shifting manufacturing base of products from one unit to a better suited one and concentration on the advantages of a particular unit.
This can also involve moving operations of one plant to another while phasing off operations from the former and re-deployment of human resources to other units.
BLCL has registered a Rs 177.5 crore turnover in the second quarter of 2001-02 against Rs 180.91 crore in the previous corresponding period.
This translated into a gross profit of Rs 1.03 crore (Rs 1.99 crore), while net profit was Rs 92 lakh (Rs 185 lakh). BLCL has targeted a Rs 800 crore turnover in another two years and profits to grow to Rs 50 crore from the present level of Rs 15 crore.
