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  1. Exide Industries plans Rs. 1400 cr capex, major investment at Haldia facility

Exide Industries plans Rs. 1400 cr capex, major investment at Haldia facility

At a time when rival Amara Raja Batteries is giving stiff competition in the country's organised battery market, Exide Industries is planning to spend over Rs.1,400 crore for the next one year on capital expenditure for technology up-gradation and capacity expansion.

By: | Kolkata | Published: June 27, 2016 6:22 PM
In its Haldia factory, the Rs. 6809-crore turnover company already has two units-- one for making general batteries and other for traction cells in industrial segment. (Source: Website) In its Haldia factory, the Rs. 6809-crore turnover company already has two units– one for making general batteries and other for traction cells in industrial segment. (Source: Website)

At a time when rival Amara Raja Batteries is giving stiff competition in the country’s organised battery market, Exide Industries is planning to spend over Rs.1,400 crore for the next one year on capital expenditure for technology up-gradation and capacity expansion. A significant amount of this capex will be incurred at its Haldia facility in West Bengal.

The Kolkata-based battery major, controlled by the Raheja family, is investing heavily for implementing the punch grid technology at Haldia facility in East Midnapore district by building an entirely new unit there. This advanced technology for batteries would be for the first time in India.

In its Haldia factory, the Rs. 6809-crore turnover company already has two units– one for making general batteries and other for traction cells in industrial segment.

“We have a planned capital expenditure of over Rs. 1,400 crore for technology up-gradation, making the organisation more cost-efficient and driving higher automation. This will enable us to reinforce our market leadership across product segments through better product quality and durability,” Exide Industries said in its recent Annual Report.

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For the technology up-gradation, the company has tied up with leading US-based lead-acid batteries manufacturer East Penn Manufacturing Company (EPM), which is providing the knowhow, technical assistance and support for the punch grid technology. Punched battery grids is a superior technology as the punching system produces consistent grids, in turn providing better life and reducing warranty cost of the battery in both automotive and industrial segments.

According to Edelweiss Securities, the punch grid technology, an advanced technology for batteries, would be for the first time in India. Aiming to regain its lost market share, Exide is incurring huge capex, around Rs. 500-600 crore, for implementing this technology, Edelweiss said in a report.

For the last couple of years Amara Raja has outperformed Exide Industries with better operational performances, resulting in market share gains for the former.

Apart from investing in Haldia facility, Exide is also implementing a large scale Cast-On-Strap (COS) line at Tamil Nadu’s Hosur, which will be manufacturing large-size batteries in the current financial year, enabling faster turnaround and output.

The battery maker at present has nine factories spread across the country. Total production capacity stands at around 34.2 million units of automobile batteries (including batteries for motorcycle applications) annually, and over 2,824 million ampere-hours of industrial power every year.

While it executed the first order in gel-based products (Powergel) for the power sector in March this year, for the railway sector two new products are under development, which is likely be rolled out in this fiscal. In solar sector it has launched all intermediate ranges and plugged in gaps in product range through strategic product launches.

Notably, Exide saw a leadership change in May this year with Gautam Chatterjee taking over as the new managing director and CEO for three years. Chatterjee replaced P.K. Kataky, who retired from services of the company on April 30.

The company’s net profit for the March quarter last fiscal rose 29% year-on-year to Rs.177.55 crore from Rs.137.59 crore for the same period previous fiscal, aided by close to 7% increase in net sales. The firm said demands for both automotive and industry batteries had shown some improvement during the fourth quarter.

Exide’s scrip on Monday closed at Rs. 167.30, up 0.84% on BSE from the previous close.

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