Financial Daily from THE HINDU group of publications
Friday, Apr 12, 2002
Ricoh to consider consolidation plan
KOLKATA, April 11
JAPANESE major Ricoh may consolidate its business operations in India, which is being currently run through three different organisations.
These outfits are Ricoh India, Gestetner Ltd and the Prima Division of Godrej & Boyce Mfg Co Ltd. All these three companies are dealing in duplicators and copiers and they are competing among themselves through different brands.
Probably for the first time, Mr K. Swetharanyan, Managing Director of Gestetner, made the point today while talking to Business Line that the three operations might be consolidated into one entity.
He said: "Yes, there is competition among us as we are somewhat in the same business. But, we have a diversified portfolio and the Ricoh group is dealing with all sorts of copiers and it is a multi-faceted industry. In all probability, these three operations will be consolidated into one business; but I really don't know when and how it will happen. I look forward to the decisions taken by my head office in London."
Ricoh's wholly-owned subsidiary, Ricoh India, was earlier a joint venture with the RPG Group. It was then known as RPG Ricoh. Some years ago, RPG pulled out of the venture.
Gestetner used to be a 51 per cent subsidiary of the holding company Gestetner UK Plc. Three years ago, Ricoh acquired a controlling stake in Gestetner in a worldwide deal, after which the Indian outfit has become a part of the Ricoh group.
In 2000, Ricoh, through its UK-based subsidiary NRG International Ltd, entered into a techno-economic tie-up with Godrej & Boyce Mfg Co for marketing and after-sales services of multi-functional photocopiers, both digital and analog.
Earlier, top Ricoh officials had said that it would not merge its businesses because that was the way Ricoh functioned all over the world. However, today's statement from the Gestetner MD indicates a totally new direction.
Ricoh, however, will not increase its stake in the Indian unit of Gestetner.
Mr Jahar Sengupta, the Gestetner Chairman, said there were no plans for a buyback as the "cash position'' was not comfortable. He was addressing shareholders at the 78th annual general meeting of Gestetner.
For the year ended December 31, 2001, the company's turnover dropped by 7.35 per cent to Rs 71.77 crore from Rs 77.46 crore in the previous year.
Similarly, net profit dropped by 51.53 per cent to Rs 1.11 crore from Rs 2.29 crore. Currently, almost 65 per cent of the Gestetner business is being generated by trading Ricoh products and the rest from production of duplicators.
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