The Hindu Business Line : BPL to shut down refrigerator plant

BPL has decided to shut down its refrigerator plant with the group company, BS Refrigerators Ltd, applying for closure of the factory under the provision of Industrial Disputes Act.

The company has cited working capital constraints as the reason behind the move to close the plant located at Whitefield in the outskirts of Bangalore.

Sanction for the closure has to be accorded by the Labour Department, Government of Karnakata and the same is awaited, the company said in a statement to BSE.

BPL Ltd, which handles the core colour television business, has been involved in a prolonged financial restructuring exercise, and is reportedly close to finalising equity infusion from its long standing technology collaborator, Japan's Sanyo.

The industry observers said the latest move perhaps confirms the speculation that BPL would like to focus on its mainstay CTV business as it tries to tide over a crisis that has shaken the market's faith in this one-time behemoth. When contacted, BPL offered no comment on the closure of the refrigerator facility.

The home appliances business of BPL has been facing problem for most part of its existence as the group focused on CTV in which it was the undisputed leader till the late 90s. However, the brand enjoyed significant clout in the frost-free segment of the refrigerator market where it led with 22 per cent share at one time.

It must be mentioned that the direct cool segment dominates the Indian refrigerator market and the company did not succeed in making much impact, with market share under five per cent. As working capital constraints mounted in recent years, in the wake of the group's financial restructuring, the company had attempted to stay afloat through the OEM route.

More Stories on : Restructuring | Air-conditioners & Refrigerators

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