Having acquired 80% control in Uniross, France four months back, Eveready Industries is now undertaking a major revamp of the French battery maker. The intention is to drive the market which the company lost out during the financial turmoil and help it break even.
Uniross, which is into manufacturing and marketing of rechargeable batteries, has a 10% market share in the global rechargeable battery segment, with the highest share in Europe and second largest in China. Eveready Industries of the B M Khaitan stable, the market leader in dry cell batteries in India, had acquired a controlling stake in the French company involving a maximum payment of €10 million through a mix of equity and debt.
Talking about the restructuring exercise, Deepak Khaitan, vice-chairman, Eveready Industries, told DNA Money, “We are in the process of integrating the systems. We are getting the debt restructured and working on various parameters to revamp the company, which faced the impact of the global turmoil.”
It is learnt that the company could not cope up with stocks to supply for Christmas festive season. In Europe most of the despatches ideally happen in July. However, the company is aiming to set its processes right by the end of the calendar year so that it can gear up for the big season in April-June next year.
Khaitan said, “Uniross has a July-to-June year and has losses of around half-a-million euros. The aim is to break even by June. It is true that the financial carnage had pulled down markets affecting many companies. But now we have pumped in money and hope to get back suppliers’ confidence and things to normalise.”
A review meeting in Paris this month is likely to discuss a host of issues including working out strategies for the company. Uniross hopes to rake in revenues of €30-35 million in the coming year.
Back home, Eveready plans to grow the business with its battery and non-battery divisions, according to the vice-chairman. Being in the black in 2008-09 with a 200% growth in profits, Eveready is looking at a 10-20% growth in business in India.
While identifying some of the key strengths of Eveready, an analyst with Bank of America-Merrill Lynch, said, “Eveready has clear leadership position in battery and flashlight businesses, a strong distribution network and strong presence in faster growing and high potential rural and semi-urban markets”.
On risks, the analyst said, “Zinc prices have started firming up after correcting substantially from the peak, a sharp rise would lead to erosion of margins.” He said that deterioration in Uniross business may put pressure on the profits of the company.
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