Sunday July 20, 02:22 AM
With zinc down, Eveready expands plant
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By Corporate Bureau
Eveready Industries India Ltd, one of the largest manufacturers of carbon-zinc batteries selling around 1.2 billion batteries every year nationally, is increasing the capacity of its Haridwar manufacturing unit at an investment of Rs 25 crore. The Haridwar unit, Eveready's tenth, which began production in April 2007 with a capacity of 360 million AA batteries a year, will be scaled up to 640m a year by 2009, mostly carbon-zinc AA and AAA batteries, according to Subir Chaki, president for manufacturing at Eveready. Carbon zinc batteries or dry cells come in three sizes--- D, AA and AAA. Sales of the largest, D, had slowed in its traditional market, rural India. However, the company reported a "handsome growth" in sales volume of AA batteries in the last three quarters of 2007-08, at 22% on the corresponding period of the previous year, after a de-growth in the first quarter because of prices increases. "Last fiscal, our total turnover was around Rs 900 crore and this fiscal the target is a 15% increase in the pencil battery segment sale," said Chaki. Eveready is also a big player in branded tea. At present, the company sells around 800 million pencil batteries a year, he said. The prices of zinc, the key ingredient in these batteries, have come down in recent months after shooting up last year. Last year, zinc was quoting at $2,800 a tonne on the London Metal Exchange. This year, prices have come down to $1,800-1,900 a tonne. "We buy 800 tonne of zinc per month, so last year our business was adversely affected," he said. The directors have noted in the annual report for 2007-08: "...over the past few months, there has been significant softening in the price of zinc. Though other prices of other commodities used in batteries have increased, lower zinc price has resulted in margin expansion." Over the past two years, the zinc upsurge had forced Eveready to increase prices by 20-50%, the last occasion being January 2007.
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