The Rahejas-owned Exide Industries has picked up a 51% stake in Leadage Alloys India (LAIL), an unlisted Bangalore-based lead smelting company, for Rs 34 crore.
Following the agreement between the two companies, LAIL along with their associates will continue to hold the balance 49 % in the company’s total paid-up capital. According to the agreement, the promoters of LAIL will be in charge of the company’s day-to-day operations.
The acquisition comes on the heels of Exide Industries’ buyout of another unlisted lead-smelting company Tandon Metals s in October last year for Rs 25 crore.
Since global lead prices have been on an upswing, the two acquisitions are expected to help Exide increase its use of recycled lead and lead alloys for making storage batteries. And this would, in turn, reduce the company’s dependence on imports of lead — the principal raw material for storage batteries.
Elaborating on the acquisition, Exide Industries managing director TV Ramanathan said, “The company-owned lead smelting units will not only make Exide self sufficient in the long run, it will also help the company have better control over recycling of used batteries that they buy back from the market as part of regulatory framework for storage battery manufacture.”
“This investment in our own smelters is not just a backward integration project for Exide. It is part of our commitment to the environment, whereby we will have better control over disposal of used batteries and plastics,” said Exide Industries director automotive Mr PK Kataky.
The new partnership, according to Leadage Alloys India chief executive T Arun Kumar, will result in significant synergy for both parties given the fact that the entire cost-efficient facilities of Leadage get leveraged by Exide to meet its diverse lead and lead alloy requirements.
Incidentally, Exide Industries recently kicked off a nationwide green campaign towards consumer education for safe disposal of used batteries. The lead contained inside a storage battery can be hazardous, unless it is handled carefully. The campaign will not only seek to directly educate storage battery customers, but also the general public at large through posters, leaflets and print ads.
Source: Economic Times