(From left) G Chatterjee, MD & CEO, and R G Kapadia, chairman, Exide Industries Limited, at the company's 69th annual general meeting in Kolkata (Pic: Subrata Majumder)
Exide Industries plans to invest Rs 1,400 crore over the next two years to introduce more durable automotive batteries in India, which would be at par with those in developed countries.
The entire amount will be spent for acquiring the new technology and importing the required machine to manufacture high-performance batteries.
Of the planned capital expenditure, Rs 700 crore will be invested in its plant at Haldia in West Bengal from where batteries with punch-grid technology will be rolled out in the coming year. Exide has tied up with US-based East Penn Manufacturing Company for the technology as well as the machine.
“Batteries with the new technology will be initially rolled out from our Haldia plant and gradually, other facilities will also start producing the same”, Exide’s Managing Director and chief executive officer Gautam Chatterjee said after the company’s annual general meeting here on Tuesday.
The remaining Rs 700 crore of the planned capex will be invested across the rest of the four automotive battery manufacturing plants over 2017-18.
In the initial stage, the Haldia plant will manufacture one million such batteries for the automotive segment, which will be scaled up gradually as other facilities start making the projected battery.
The company has a total installed capacity of 12.2 million units, of which the Haldia plant accounts for 2.2 million. Last year, the company had invested Rs 260 crore in the Haldia plant to ramp up operations.
To go ahead with the venture, the firm will also need additional land of 25 acres near the existing facility. It is in talks with the Kolkata Port Trust to acquire the land.
The pricing of the new batteries, has not been finalised. The company is bullish on car sales in view of the country’s rising working-age population, which will stimulate the car market.
These batteries will be available only in the aftermarket as Exide will not enter into any tie-up with car manufacturers to offer the battery embedded in a new vehicle.
Exide is collaborating with East Penn for industrial batteries as well.
The plan outlay, as per the company, will help Exide reinforce its market leadership across product segments.
No stake dilution in insurance business
Exide Industries, which wholly owns Exide Life Insurance, a private life insurer, is not considering diluting any stake at the moment even after the government allowed upto 49 per cent stakeholding by foreign companies in the Indian insurance sector.
This was stated by Exide's managing director and CEO, Gautam Chatterjee, while responding to a shareholder's query during the AGM.
Kolkata-based Exide had acquired 100 per cent equity in the former ING Vysya Life Insurance in May 2014 after Netherlands-based ING Group exited India. The company is running in its fourth successive year of profits with a total premium income of Rs. 2,047 crore. Its Assets Under Management stands at Rs. 9, 530 crore with a 265 per cent solvency ratio.