Financial Daily from THE HINDU group of publications
Sunday, Sep 26, 2004
Industry & Economy
`Delay in divestment hurts Balmer Lawrie long-term plans'
Kolkata , Sept. 25
BALMER Lawrie & Co Ltd has initiated a dialogue with an Indonesian company to set up a joint venture manufacturing unit for grease and lubricants. However, the ongoing delay in its disinvestment programme has affected the company's long-term corporate plans.
This was stated by Mr S.K. Mukherjee, acting Managing Director, while addressing shareholders at the company's annual general meeting.
According to him, as the company is on the disinvestment list, the management is unable to chart out an expansion plan and work out strategic alliances with other companies.
"This delay has really hit us. However, we are carrying on with our consolidation programme and it is likely to be over within the next two years. After that we will chalk out our detailed expansion programme," Mr Mukherjee said.
Regarding the joint venture to be set up in Indonesia, Mr Mukherjee preferred not to disclose any details as the discussions were "in a nascent stage."
The company has identified three areas for future expansion - logistics management, travel and tourism and industrial packaging. It is looking for a strategic alliance for its tea marketing operations, leather chemicals business and tourism.
On the tea business, he said the company had suffered in the marketing area. It has decided to create a new set-up, which will be called Balmer Lawrie Tea Ltd.
The company has also decided to phase out its container leasing business and sell its property in Kochi, Chennai and Taloja.
Balmer Lawrie holds a significant market share in the oil-barrel trading business. In the current year, it is hoping to introduce value-added barrels.
Further, the company, which employs around 1,450 people, is contemplating a voluntary retirement scheme during 2004-05. A corpus of Rs 9 crore has already been identified for the purpose, Mr Mukherjee said and added: "There is enough scope for reducing the number of heads."
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