Online BusinessAmara Raja to invest Rs 95 cr
Industrial and automotive battery manufacturer Amara Raja Batteries is planning to invest Rs 95 crore in 2009-10 to enhance its manufacturing capacity among others.
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Speaking to Business Standard K Suresh, chief financial officer, Amara Raja Batteries, said the proposed investment would be used to increase the capacity of valve regulated lead acid battery (industrial battery division) and motorcycle battery (automotive battery division) apart from regular maintenance purpose.
The capacity of VRLA battery would be increased 50 per cent to 1.80 million units from 1.20 mu, while motorcycle battery would be increased to 2.40 mu from 1.80 mu. The proposed expansion will get over by October or November.
The company is also planning to increase its export business to 10 per cent from the current 8 per cent of the total turnover. As part of overseas expansion, it is looking at entering the African market with its brand Amaron through its joint venture partner Tata International.
Amara Raja currently caters to Singapore, Japan, Australia, New Zealand and West Asia. According to him, the industrial battery division continued its growth momentum aided by telecom and UPS segments. The current mix of business is 55:45 (industrial:automotive).
The company has also expanded its Amaron R franchisee and retail network to 189 and 18,000 respectively. Each franchise caters to 100 retailers. It is looking at allowing mini franchises to cater to more retailers especially in the rural areas.
Amara Raja reported a 15 per cent drop in net profit at Rs 80.47 crore in 2008-09 from Rs 94.36 crore in 2007-08. The decline was on account of the forex loss of Rs 32 crore, steep fall in lead price and increase in imported input costs. For the first time, the company crossed Rs 1,500 crore in gross sales and has set a 20 per cent growth target in 2009-10.