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Exide drops Bangladesh venture
March 11, 2003 16:54 IST
Storage battery major Exide Industries Ltd has dropped its plan to set up a manufacturing facility in Bangladesh and also put on hold its joint venture with a Malaysian firm to set up a reclamation plant in India.
"We have dropped the plan of setting up a plant in Bangladesh. For the reclamation plant, it is now put on hold," company sources said.
The company had planned to enter into a joint venture with the Nitol Group of Bangladesh for setting up the plant at an estimated investment of about Rs 10 crore (Rs 100 million).
However, as the situation was not conducive for investment, Exide has withdrawn the proposal.
Besides, the company has put on hold its joint venture plans with Metal Reclamation Industry of Malaysia and Austrian firm Jungfer, the sources said.
"We cannot make any progress about the reclamation plant unless the issue of collection of scrap is solved. There is not enough supply of scrap battery and the dealers are not willing to make transactions through cheque payments, thus posing problem for us," they said.
Exide had earlier decided to enter into a 26:74 joint venture with the largest Malaysian smelting firm to set up the plant at an investment of Rs 75 crore (Rs 750 million).
The two companies had planned to start with an initial lead reclamation capacity of 10,000 tonne per annum and later expand it to 20,000 tonne per annum.
About the proposed JV with Austrian firm Jungfer, the sources said it had to be postponed as Jungfer was recently taken over by a US company.
"Therefore, if we are to pursue the plan, we will require to initiate fresh talks with the new management," the sources said.
Meanwhile, the Kolkata-based company has offered voluntary retirement to 150 employees at the head office and Shyamnagar plant in West Bengal, they said.
About the financial performance of the company, the sources said it was expected to register about 16-18 per cent increase in its turnover to Rs 1,142-1,162 crore (Rs 11.42-11.62 billion) and a healthy growth in profit margin during 2002-3 over the previous year.
Exide had recorded a net profit of Rs 31.42 crore (Rs 314.2 million) over a turnover of Rs 984.8 crore (Rs 9.848 billion) last fiscal.
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