Battery major Exide Industries on Monday said it will invest additional Rs.300 crore at its Haldia facility in East Midnapore district for producing technologically advanced motorcycle batteries after pumping in Rs.700 crore for car batteries following technical collaboration with US-based East Penn Manufacturing Company (EPM).
The Kolkata-based battery major, controlled by the Raheja family, has implemented the punch grid technology at the Haldia facility by building an entirely new production unit of over one million pieces annually. EPM is providing the knowhow, technical assistance and support for the punch grid technology.
“After implementing the punch grid technology, Haldia has now become the most modern battery manufacturing factory in the country. We have already invested Rs. 700 crore for producing new range of automobile batteries. We will sell those batteries at premium prices under a sub-brand of the mother brand,” Exide Industries managing director and CEO Gautam Chatterjee told reporters after the inauguration of the new production unit here.
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“We will invest another Rs. 300 crore in this facility over an 18-month period from April for producing the new range of motorcycle batteries,” Chatterjee said. With the implementation of the new technology, the Haldia plant’s capacity will rise to 3.5 million units annually in the next fiscal from 2.2 million units earlier.
According to the company, this technologically advanced batteries, being manufactured with advanced robotics and automation, will give it a strategic edge to compete with domestic as well as foreign battery manufacturers. Significantly, for the last couple of years Amara Raja has outperformed Exide with better operational performances, resulting in market share gains for the former. On the other hand, low priced batteries from countries like China and Vietnam are entering India on the back of Free Trade Agreements (FTAs).
Asked about impact of demonetisation on the company’s sales, Chatterjee said Exide witnessed a 30% drop in its sales in two- wheeler OEM (original equipment manufacturer) segment in the month of December last year. Sales in replacement market, however, remained unimpacted so far.
“We have seen the sales of OEM in motorcycle segment dipped by 30% in December. As there is one to one correlation, our sales are also down by 30% in this segment during the period. But, we have not felt any impact in the sales for replacement market,” he said. Exide currently has about 70% market share in two-wheeler OEM segment, while for the same category in car segment it enjoys a 60% market share.