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Bata India to close flagship plant for two weeks

Footwear company Bata India Ltd, grappling with a sluggish market, plans to close its flagship plant for two weeks this month partly to cut inventory, an official said on Thursday.

The plant in Batanagar township, 30 km south of Calcutta, is the largest Bata factory in the world.

"The market is sluggish for shoes. There has been no growth this year," M J Z Mowla, senior vice-president of Bata India Ltd, said. "Priorities have changed. People are buying other stuff than shoes."

But he said he expected the outlook to get better.

"We expect the market to improve in the next couple of months," he said without elaborating.

Bata India Ltd swung to a net loss of Rs 30.20 million in the first quarter ended March 31 from a net profit of Rs 39.60 million a year ago.

Mowla said the plant would be closed from May 21 to May 25 and the company, the Indian affiliate of Canada-based Bata Shoe Organisation, would close from May 28 until June 3 as part of its annual compulsory privilege leave programme.

"We're shutting down the plant ...in order to recover outstanding dues from wholesalers," he said. "We'll use the period to reduce built-up inventory as part of our planning and distribution."

Bata's shares closed up 8.4 per cent on Thursday at Rs 36.75 on the Bombay Stock Exchange, while the benchmark index rose 2.16 per cent.

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