Exide doubles capex to Rs400 cr

Exide Industries Ltd, the automotives battery major, on Wednesday, announced that it has planned a capital expenditure of Rs 400 core for the financial year 2010-11 in order to meet the growing demand from the car and motorcycles sectors.

“This will be to increase production capacity at our plants,” said T V Ramanathan, managing director and CEO, at the sidelines of the company’s annual general meeting here on Wednesday.
On an average, the company spends Rs 200 crore on capex every year, but this it has been doubled to Rs 400 this year in order to meet the increasing demand.

He said that the company has plans to increase the capacities for car starting-lighting-ignition (SLI) and motorcycles segments by 28 per cent and 60 per cent respectively.

“We will earmark Rs 80 crore for our proposed Ahmednagar plant in Maharashtra that would come up in August 2010,” Ramnathan said. The Ahmednagar plant will manufacture motorcycle batteries.

It is learnt that Rs 400 crore of additional capital expenditure would be from the kitty of Rs 530 crore that the company raised this year from the qualified institutional placement.
Ramnathan said the company would depend more on its smelting facilities to source lead.

According to Ramnathan , in 2009-10, the companies existing smelters met 42% of the total lead requirement.

“We will be sourcing 70% within the next couple of years either through expansion of the existing smelting facilities or through acquisition of new capacities. We are open to both organic and inorganic route,” he said. Speaking on the occasion, Ramnathan also said the company’s board has approved acquisition of its entire holding in its Bangalore-based smelting unit, Leadage Alloys India Ltd. The acquisition process will be completed by December 2010,” he said. According to him, plans are also there for merger of the lead smelter subsidiaries. “This will effectively bring down the input costs,” he said.