Eveready Seeks China Partner

Kolkata, Aug 26 | Updated: Aug 27 2004, 05:30am hrs
The BM Khaitan controlled Eveready Industries India Ltd is looking for a manufacturing base in China by teaming up with a local manufacturer.

Deepak Khaitan, Evereadys executive vice-chairman and managing director, told reporters here after the companys 69th annual general meeting (AGM) on Thursday that the talks are at a very preliminary stage.

"I have visited China recently and Im very impressed with their battery manufacturing facilities. We are examining the possibility and have shortlisted two or three companies. It will take another three to six months for this plan to materialise," Mr Khaitan said.

He also said Eveready will get all types of quality batteries -- from bread- and- butter zinc-carbon ones to rechargeable batteries -- made at the plant and sell them under the Eveready brandname in India, under the Chinese partners brand in China and under the Lava name elsewhere.

However, Mr Khaitan declined to mention the size of the stake or the investment planned in the Chinese company. Eveready will leverage its brand equity in the proposed joint venture. "The Chinese make excellent batteries but they dont have a brand. Without a brand, it is simply a commodity," Mr Khaitan said.

I have visited China recently and Im very impressed with their battery manufacturing facilities. We are examining the possibility and have shortlisted two or three companies. It will take another three to six months for this plan to materialise
Deepak Khaitan

In June this year, Eveready split its business into two entities. While the McLeod Russel name has been revived to run the bulk tea business, Eveready has retained the FMCG business of batteries, flashlights and packet tea.

Earlier, addressing shareholders, Mr Khaitan said the company is stepping up outsourcing of high-end batteries from places like Hong Kong and Japan. It has also emerged as a supplier to many original equipment makers (OEMs) to companies in countries like Japan, Chile, Australia and Hong Kong.

Evereadys oldest plant, at Cossipore in north Kolkata, is being given a facelift. Production capacity will be raised to 200 million batteries a year, from 80 million units now.

Eveready currently has a 46 per cent marketshare in batteries, over 80 per cent marketshare in flashlights and about one per cent in packet tea.

According to Mr Khaitan, the packet tea business will get a renewed thrust this year. The company currently owns brands like Tez, Premium Gold and Jaago in its packet tea business.

The 99-year-old Eveready has also signed up Amitabh Bachchan to endorse its products. According to Mr Khaitan, a brand building exercise will be unleashed soon on its centenary year. Eveready reported a loss of Rs 37.3 lakh on a turnover of Rs 893 crore in 2003-04 against a pprofit of Rs 11 crore on a turnover of Rs 879 crore in the previous fiscal.