Financial Daily from THE HINDU group of publications
Tuesday, Jan 29, 2002
Financial Daily from THE HINDU group of publications Tuesday, Jan 29, 2002 |
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Restructuring Corporate - Restructuring Gillette to unplug Duracell Our Bureau
NEW DELHI, Jan. 28 GILLETTE India Ltd has ceased production at its Duracell plant at Manesar, Haryana. The company will now source all alkaline batteries from other Duracell facilities worldwide. Following a review of the Indian alkaline battery market, Gillette India has restructured its battery operations and successfully implemented a voluntary retirement scheme (VRS) at its Duracell plant. Making the announcement today, Gillette India reiterated its commitment to grow its alkaline battery business in India. Mr Zubair Ahmed, Managing Director of Gillette India, said "the alkaline battery market is still in a nascent stage in India. The marketing efforts behind Duracell in India will continue, the only change will be in the sourcing of AA size alkaline batteries.'' The Duracell plant manufactured only AA size alkaline batteries, while other sizes were being imported. The Board of Directors of Gillette India at its meeting on December 21, 2001 had appointed a review and implementation committee to study an independent report on the company's non-grooming businesses in India. The report indicated that growth within the Indian alkaline battery market was below the projected rate. Also, improved efficiencies at Duracell plants world-wide, coupled with highly competitive global market conditions, made it no longer cost-effective to export from the Duracell Indian plant, according to the company. Maintaining production for the Indian market alone was not viable and placed severe financial constraints on the company. After considering all options, a VRS was offered to and accepted by the employees at the Manesar plant. Employees were also offered support from placement agencies, tax and investment advisory services, entrepreneurial development programmes and counselling services, the company said. In view of the above, it was decided to cease production at this plant. "The decision to discontinue production at the Duracell India plant is in line with the Gillette Company's commitment to reduce costs, improve productivity and enhance shareholder value,'' Mr Vijai N. Mathur, Gillette's Director of Legal and Corporate Affairs for India and South Asia, said. Further, in order to strengthen the financial position and meet its long-term commitments, the Gillette Company, USA has announced that it would infuse funds voluntarily into Gillette India by way of capital grant. The details of the capital grant infusion are still being worked out and will be subject to necessary regulatory approvals, the company said. For the nine-month period ended September 2001, Gillette India has reported a turnover of Rs 353.97 crore. The equity capital of the company is Rs 32.59 crore.
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