The Hindu Business Line : UB Group plans to consolidate operations

The UB Group is considering a move to consolidate its administrative operations under UB Holdings and charge transaction processing fee to its companies such as McDowell's and United Breweries for using its services.

The Group President and Chief Financial Officer, Mr A.K. Ravi Nedungadi, told Business Line that entities such as McDowell's and United Breweries should be allowed to focus on their main business and let UB Holdings operate a centralised shared system.

"This will ensure cash flow for UB Holdings which is in fact an investment company," he said. He said perhaps later such a service can be thrown open to companies like Scottish & Newcastle, which is a part owner of United Breweries.

"We have several hundred accountants and one needs to streamline the operations," Mr Nedungadi said. He said this will ensure even hidden costs will be out of the system. Such a system will also make the group companies more flexible, more scalable and lead to huge cost advantage.

Cash flow

He said there was no need to recreate the roles in each and every company and instead use new technology to streamline the processes. UB Holdings had lots of assets but not enough cash flow. This will ensure that UB Holdings will have enough cash flow.

He said with some of the leading international liquor companies entering India, it was necessary for the group to make the best use of its resources to ensure that the group stays ahead of the competition. "This is a golden moment and we shouldn't let it pass," he said.

During the first quarter of 2006-07, UB Holdings, the parent company of Kingfisher Airlines, reported a net profit of Rs 1.08 crore with total income recording over 900 per cent growth to Rs 50.23 crore. During the same period last year, UB Holdings had posted a loss of Rs 12.34 crore.

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