Eveready Industries India, the Brij Mohan Khaitan group tea and battery maker, has decided to defer the demerger of the two businesses as the current conditions were not conducive to such a proposal. Rabo Bank was mandated to study the demerger.
Meanwhile, the financial restructuring is underway. The loan component at the end of the year stood at Rs 788 crore as opposed to Rs 872 crore in the previous year.
Financial restructuring apart, operational consolidation is also being considered.
Deepak Khaitan, vice-chairman and managing director, said the company was consolidating some of its manufacturing facilities. For instance, in Chennai Eveready had two units which were being consolidated into one. An agreement with the labour force has already been signed to this effect.
The other aspect being looked into is, logistics management. This would entail rationalisation of warehouses across the country. Given the cost reduction measures and the proposed enhancement in battery volume by 17.5 per cent, Eveready does not envisage an increase in overhead cost.
The company posted a profit after taxation of Rs 11.13 crore at the end of financial year compared with a loss of Rs 53.33 crore last year. Sales stood at Rs 942.53 crore. The sales volume of batteries stood at 957.27 million recording a growth of 17.7 per cent over the previous year.
Khaitan said, the target is to achieve sales of 1 billion batteries. The total capacity of the plants is 1.2 billion batteries. The company would endeavour to increase market share from 42 per cent to 45 per cent.
On the tea business front, Khaitan said, Eveready would increase production capacity through bought leaf.
The company achieved a total production of 38 million kg through 18 lakh kg of bought leaf. The plan is to increase bought leaf to 50 lakh kg and target a production of 43 million kg.
Khaitan said, if the situation improved then the company would even consider acquiring some tea gardens. It maybe mentioned, the company some time back, had resorted to selling tea gardens as part of debt reduction exercise.
Eveready has also branded some of its bulk tea
