Of this, around Rs 90 crore would go into expanding the capacity of its automotive battery plants at Shyamnagar in West Bengal, and Taloja & Chinchwad in Maharashtra,while around Rs 60 crore was for the industrial segment and the remaining would go into research and development projects.
Nearly 70 per cent of its institutional customers were now following the London Metal Exchange(LME) benchmark in lead prices as against 10 per cent customers in FY07, informed T V Ramanathan, managing director and chief executive officer, Exide Industries. This was around 60 per cent of all customers, he added. While this protects them against rising prices, it benefits Exide when the commodity prices drop.
Lead prices have been volatile since the beginning of the year. It was at $2,589 per tonne in March, 52 per cent on a year-on-year basis, then down to $1,580 per tonne in June and once again up at $2200 per tonne now. The company has not raised prices of batteries this fiscal so far, but Ramanathan indicated at a price increase if lead prices touch $2,500 per tonne. Lead comprises nearly 70 per cent of the material cost per battery.
Exide targeted a 15 per cent increase in revenues this fiscal. Nearly 60 per cent of its revenues were from automotive batteries and the rest from the industrial segment.
As backward integration to ensure a secured supply of lead, Exide had picked up a 51 per cent stake in Leadage Alloys in June 2008 after acquiring Tandon Metals in October last year. It planned to source around 70 per cent of its net lead requirement from these two lead smelting firms in the coming three years. As of now it provided a 10 per cent cost benefit to the company that imported around 40,000 tonnes of lead annually of its net requirement of 1.55 lakh tonnes.
This apart, the company with four domestic and four international subsidiaries,was also open to consolidating subsidiaries with relative synergies in operation. This, however, was not an immediate plan, Ramanathan clarified.
