Eveready eyes distribution business

Our Corporate Bureau

Kolkata, Aug 31: For Brij Mohan Khaitan’s Eveready Industries India Ltd, it is now a question of adopting a new line of business. The company is thinking of entering the distribution business to boost its turnover.

Eveready said the new venture will be its “fourth line of business,” apart from its core of packet tea, bulk tea and batteries.

Briefing reporters after the company’s 66th annual general meeting here on Friday, Eveready executive vice-chairman and managing director Deepak Khaitan said the company is in talks with several multinational companies based in the east who may figure in its scheme of things.

The new line will rely on Eveready’s fleet of 800-odd vans that traverse the hinterland hawking Eveready torches, zinc carbon, alkaline batteries and packet tea — Tez. As of now, the operation is particularly strong in northern India.

“We have increased the number of vans to 1,000 and from end-November, they will travel extensively throughout the country carrying consumer goods, ranging from toilet soaps to hair oils. Although we haven’t decided as yet, we may also sell insurance policies in this operation,” Mr Khaitan said.

In the battery business, Eveready is all set to launch its own alkaline batteries under the same brandname in November. The company is optimistic that its battery division will come up with better performance during the current fiscal as anti-dumping duty has been slapped by the government on cheap Chinese imports.

“Early indications for the present year are good, unlike last year where there was a flurry of cheap Chinese imports, a negative growth in the industry and a high cost of zinc. We currently have a 43 per cent marketshare in batteries, which we hope will rise in the current year,” Mr Khaitan said.

On the tea business, Mr Khaitan said adverse weather and a gloomy market, depressed performance. “We had followed new plantation techniques last year which was also partly responsible for low production,” he said. The company has convened a board meeting to decide the fate of some “unviable” tea gardens. It operates in 28 tea estates spread across West Bengal and Assam. In the packet tea segment, the company has decided to aggressively market Tez, Premium Gold and Jago, and will also be a part of its mobile van operation.

As part of its restructuring exercise to reduce its interest burden, Eveready had amalgamated Bishnauth Tea Co with itself last year and had decided to sell a few tea gardens to reduce its interest burden. Mr Khaitan, however, declined to name the gardens.

Meanwhile, the company will continue with its restructuring exercise with the agreement of banks and financial institutions. It is currently in talks with ICICI, its principal lender, for rescheduling long-term loans.

“We are talking to them to bring down the interest level to 11 per cent from 16 that they are charging now,” Mr Khaitan said.