Eveready plans land sale to slash debt

Eveready Industries India Ltd of the B M Khaitan group company, which has a debt of Rs 296 crore, hopes to become a debt-free company in 2010-11 by selling 26 acres of property at its Hyderabad facility.

Deepak Khaitan, vice-chairman, Eveready Industries, said at the company’s annual general meeting, “We have an outstanding debt of almost Rs 300 crore, including Rs 120 crore of working capital. In the current year we hope to reduce the burden by Rs 40-50 crore mainly through internal generation.”

The company has suspended its Hyderabad operations a few months back and a voluntary retirement scheme (VRS) for about 200 people has been agreed upon with the workmen’s union. This Hyderabad unit was mainly producing D-sized batteries, which turned out to be unremunerative. 

The dry cell major, which is back in the black, has acquired Uniross SA, one of the leading companies in the rechargeable market. It is also looking at revving up sales from the non-battery segment in a major way.

“This year the focus would be on the current acquisition and the next two years we will concentrate on consolidation. Rechargeable batteries are doing well and will gradually replace alkaline batteries. Moreover, we were so long sourcing these from China. With this acquisition, we will have manufacturing facility in China through Uniross,” Khaitan said.

In the next two to three years, the company plans to focus more on the non-battery segment. Keeping its market share intact, it plans to bring down the share of batteries in its turnover to 45% from the present 70%.

Batteries went through significant price increases to offset material cost push in the recent past, which ranged between 20% and 50%. The company’s flashlight business also saw degrowth. Khaitan said the turnover was likely to grow by 10-20% in the current year.