Balmer Lawrie gets Indonesia grease unit offer

Balmer Lawrie & Co Ltd (BLC) has received a joint venture offer from an Indonesian company for setting up a grease manufacturing unit in Indonesia, S K Mukherjee , managing director, said at the company's 87th annual general meeting (AGM).

"We have just received the offer. Though in a nascent stage it still forms a major part of our overseas expansion plan", he said.

BLC is undergoing a consolidation' and restructuring, which would pave the way for a major expansion. The consolidation is expected to be complete within two years, Mukherjee added.

The company will be coming up with its expansion plans in logistics management (LM), grease and lubricant (G&L) , travels and tours (TT) and industrial packaging (IP) business units as soon as the disinvestment issue gets cleared up.

"Though the disinvestment is on 'hold' but the delay in clearing the issue is decelerating our expansion plans", Mukherjee said.

BLC might be opting for strategic alliances in its leather and chemicals, tea and T&T business units with some specific relevant expertise which the company lacks in these segment.

Balmer Lawrie (UK) Ltd, a subsidiary of BLC, is going to hive off its tea blending and packaging unit as a separate business unit Balmer Lawrie Tea Ltd, Mukherjee added.

The steel and base oil price hike has been a blow to BLC's LM and G&L business last fiscal, the company is though optimistic of a steady performance in 2004-05.

With the objective of strengthening its 'value-added barrel segment' such as lacquer-lined barrels , BLC has already invested Rs 6 crore in its Silvassa plant, he informed.

BLC claims to enjoy more than 50 per cent market share in barrel trading. In continuation to its voluntary retirement scheme (VRS) BLC will be coming up with another VRS scheme during the current fiscal. The total corpus has been set at Rs 9 crore.

"We sincerely believe that there is a scope for undersizing employee numbers from the existing 1,454. We have yet not set any target for this year's proposed VRS ", he added.