The Hindu Business Line : Philips plans to sell unit in Kolkata

PHILIPS India is planning to sell its production facility at Kolkata, which is one of the three units engaged in the manufacture of lamps, lighting system and tube light glass shells for the company. However, the proposed sale offer of Tartolla unit in Kolkata, excludes the lamp-making equipment.

It has entered into a memorandum of understanding with Kitchen Appliances India Ltd, a subsidiary of the television and white goods major, Videocon group. The tentative value of the sale is put at Rs 1 crore. The sale offer would take a final shape only after Philips India's shareholders give their approval at the annual general meeting scheduled later this month.

The decision taken at the company's board meeting stems from an assessment that the cost of production in Philips India's other units in Mohali in Chandigarh and Vadodara in Gujarat, were substantially lower than in the Tartolla factory in Kolkata.The decision is in line with the company's goal towards increasing operational efficiencies and productivity improvement enabling the lighting business to be more competitive, said Mr K. Ramachandran, Philip's Vice-Chairman and Managing Director, CEO (India).

He, however, said that final details about the proposal would be clear only after the shareholders give their consent.

Besides, he added the proposal also has to conform to statutory approvals. The principal terms for the proposed sale include taking over of the services of the employees of the factory, which currently has 146 employees.

Philips India, which has been through a restructuring process in the last two years, has taken measures to consolidate its businesses to achieve competitiveness and emerge as a strong technology and lifestyle brand. During the period the company continued its focus of moving out of non-core areas and it had divested the Communication, Security and Imaging (CSI) activity. CSI was hived off globally to Robert Bosch of Germany last year and the Indian subsidiary unit also became part of MICO-Bosch here.

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