Financial Daily from THE HINDU group of publications
Thursday, Jul 15, 2004
Agri-Biz & Commodities - Metals
Exide chief concern over lead prices
Kolkata , July 14
THE Chairman of Exide, Mr S.B. Ganguly, today said that the rising lead and lead alloy prices are concerns for the company during the current financial year.
Though, he indicated that the price rise since January this year of around 15 per cent, would largely be passed on to the consumers, going forward things may be difficult.
"There is a real scarcity in the global lead market. Firmer prices are on the cards. We have increased inventory position of the raw materials to three months' needs. But that is not proving enough.
"The hedging in the metal futures and appreciation of rupee against dollar had smothered the effect to some extent."
But further price rise could be resisted by the buyers in the auto OEM segment, industry sources suggested.
The battery leader has devised a two-pronged manufacturing strategy to beat the lead price pressure.
According to Mr Ganguly, the expansion of the grid plate facility has already been installed at Chinchwad plant to reduce lead consumption. Similar facility is also being installed in all its manufacturing units.
The lead reclamation project is also being getting a boost. The company has already started the project in association with a small local player.
"But the proposed joint venture with a Malaysian outfit - MRI - will take off soon. As the price spiral for lead is evident in the near future, viability of this project at a large scale (40,000 tonnes per annum) is ensured," he told Business Line. However, the project details and location was yet to be finalised, he added.
He also said that the 5 per cent duty cut for lead import proposed in the 2004-05 Budget was not sufficient. "We have asked for a total 15 per cent reduction to just 5 per cent to keep ourselves internationally competitive," he added.
Regarding battery dumping by Thailand, with which India has recently signed a preferential trade agreement, the Indian battery markers need protection from such free imports, Mr Ganguly said. The bound duty under WTO on the product is 20 per cent, at which the general import duty has been fixed. However, bilateral trade agreement has made it even lower.
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