The Hindu Business Line : Exide to double capacity in 2 years

Battery major Exide Industries Ltd is looking to double its overall production capacity within two years and is on course to achieving revenues of $1 billion (about Rs 4,000 crore) by next year.

The company sees the overall product mix also changing from a dominant automotive segment to similar growth from the industrial sector business.

The Chairman of Exide Industries, Mr S.B. Ganguly, said “the company achieved revenues of Rs 3,300 crore last year and expects to close this fiscal with about Rs 3,500 crore. Given the current momentum and business prospects, we are poised to achieve Rs 4,000-crore revenues by next year.”

“In fact, we would have managed to achieve this milestone by this year itself had we stretched a bit. But with major expansion plans now under way, it would now take us one more year to achieve this,” he said.

Referring to the business, he said from 60:40, with the automotive sector dominating, this mix is gradually poised to shift to 50:50 within couple of years due to demand from multiple industrial applications.

During his visit to Hyderabad, Mr Ganguly said “the domestic demand is huge and continues to grow significantly and this is engaging most of the company’s attention. There are no signs of any let up of this demand for us to look at tapping overseas markets.”

However, the company is also in the process of consolidating its overseas presence through marketing channels in the US, Australia and the UK.

Expansion prospects

Asked about the plans for inorganic growth, Mr Ganguly maintained that the company has already made a couple of acquisitions, including that of Standard Batteries, and the focus now is on business consolidation as Exide expands capacities rather than further acquisitions.

The company has nine plants and is doubling the existing capacity from 5 million to 11 million in all these plants, and changing the product mix. The entire expansion project is poised to be completed by the next fiscal with an investment of about Rs 200 crore to Rs 250 crore per annum.

Spiralling demand, prices

On exports, Mr Ganguly said this accounts for about 7 per cent and has the potential to go up.

The concentration is on serving the domestic market. However, with most of the major manufacturers validating Exide products in test conditions overseas, these batteries are now powering export models too. This may later add to the replacement market.

Like in some of the developed markets, the demand from the industrial sector is set to shoot up, providing a much larger canvas to focus on, he explained.

On spiralling prices, Mr Ganguly said “Lead prices have gone up by about 10 times to $4,300 per tonne in the last three years causing concern. However, we have raised prices by just 32 per cent last year, without fully passing this on to consumer.”

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