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Boby Kurian
V.K. Varadarajan

Bangalore , Dec. 9

EXIDE Industries Ltd has revived the proposal to set up a smelter plant through a joint venture with Malaysian Reclamation Industry (MRI).

The project, which was shelved last year, is being once again looked into as the London Metal Exchange (LME) price of lead has firmed up in the recent past, Mr S.B. Ganguly, Chairman & Chief Executive of Exide Industries Ltd, said.

"The price of lead on LME has risen again, and this is the time to revisit the project. We are in talks with MRI, but there is also concern how long the current upswing in the price would hold," Mr Ganguly said.

The project, if implemented, would be an equity joint venture with MRI holding majority stake. "We will only have a minority share holding, may be 40 per cent. The Malaysian company will provide technology and management and we would be providing them with scrap batteries with an arrangement to take back extracted reusable lead," he added. It is learnt that the smelter (reclamation) plant project could cost around Rs 120 crore.

With the domestic automotive market remaining buoyant and Exide Industries reporting 16 to 18 per cent growth in annual sales, the company would look at reusing 15 to 20 per cent of lead used in batteries manufactured annually through the reclamation process. The Golden Quadrilateral project has also helped the company's performance, while sectors like power and telecom were adding to the industrial battery business, Mr Ganguly said. The reclamation of lead assumes significance as the company is not contemplating a strategy for backward integration or long-term sourcing of virgin lead.

It must be mentioned that lead imports currently attract 20 per dent duty impacting competitiveness of Indian companies in pitching for battery outsourcing deals from the West. This trend has been on the rise.

UK's auto major Rover MG is the latest to scout around for global outsourcing of lead acid batteries for its new international offering. Mr Ganguly said Exide was in advanced talks to ink a deal with Rover, which would bring significant upsides in export volume.

The Rs 1,000-crore Exide Industries, part of the Rajan Raheja Group, is the leading storage battery company in the country with significant business both in automotive and industrial battery segments. Exide recently floated marketing joint ventures with Electrical Spare Parts and Accessories (South Wales) Ltd in the UK and with Centrac BV in the Netherlands, which under agreement markets industrial battery of Exide in northern Europe.

The company has also started export of traction batteries to the South East Asian markets, including China and Japan, through its 100 per cent subsidiary in Singapore. Exide Industries' export earnings in the current financial year is expected to touch Rs 60 crore, up from Rs 35 crore last year.

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