Amara Raja Batteries Ltd has ushered in a new era seeking to focus on new energy, foray into setting up a gigafactory using the PLI scheme, focus on lithium ion batteries, while globalising its lead acid batteries.
After nearly three decades of business, the company board approved the move to focus on new areas of business, while restructuring the board which sees its Founder Chairman, Ramachandra Galla stepping down and Jayadev Galla taking up the role of Chairman. The board inducted Harshavardhana Gourineni and Vikramadithya Gourineni, both nephews of Jayadev, as Executive Directors.
In a Zoom interface, along with the newly inducted Board members, Jayadev Galla, Vice-Chairman, told Business Line: “this has been a carefully planned strategic transition both in terms of the business focus on energy and mobility as also the restructuring of the board which was planned over seven years ago.”
“While there is still huge potential for lead acid batteries, the company plans to step up exports to other markets and may even consider local assembly. Currently, exports account for about 15 per cent of the nearly $1-billion company’s total business and we believe that this could go up not necessarily in terms of volume but in terms of value,” Jayadev said.
The company has established a New Energy SBU encompassing lithium cell and battery pack, EV chargers, energy storage systems, advanced home energy solutions and related products and services. While the company expects to grow the lead acid business globally, it is looking at lithium as an alternative energy storage technology opening up growth opportunities.
Jayadev Galla said, “After a careful review of the global business opportunities, the ARBL board has decided to future-proof our business by repositioning ARBL as an energy and mobility player. The company is now well poised to build on these strengths and create multiple new growth engines in the new energy space.”
The recent board meet is of strategic importance both from the business perspective and future direction and also in terms of restructure of board, Jayadev said.
Referring to the PLI scheme, the newly inducted Director and ED, Vikramadithya Gourineni said “the company is studying the possibility of gigafactory, though no decision has been taken on it as yet. Typically, a large giga factory of about 10 GW could require an investment of about $1 billion over five years.”
“What shape this move under the PLI scheme will take will be known over the next 4-5 months,” S Vijayanand, President, New Energy, said.
Harshavardhana Gourineni said “the global market for lead acid batteries is estimated at $38 billion with our business at about $1 billion. We believe there is immense scope to grow this business locally and through exports.”
The company has been investing about ₹400-450 crore per annum to expand manufacturing capacities and plans to continue to invest. The company also plans to come up a bouquet of solutions for electric mobility, battery charging stations, swapping facilities and solutions for the fleet.