Financial Daily from THE HINDU group of publications
Saturday, Jul 16, 2005
Channels and Franchises
HBL picks Cummins arm to distribute genset batteries
Hyderabad , July 15
HBL NIFE Power Systems Ltd has chosen Cummins Diesel Sales and Service (CDS&S) as the exclusive distribution partner for its Pulse range of sealed maintenance-free generator starting systems.
HBL claimed that, including it, there are only four companies making these batteries for genset applications in the world. The others are two US companies and one from Sweden.
Addressing a press conference here today, the Chairman and Managing Director of HBL Nife, Dr A.J. Prasad, said: "CDS&S's network of 80 dealers spread over India, Nepal and Bhutan ensure adequate distribution network for Pulse. This is being targeted at the replacement market where more than 1,00,000 Cummins engines operate in the country."
The Chief Executive Officer of CDS&S, which is part of the $8-billion Cummins group, Mr Sundar Parthasarathy, said these maintenance-free batteries serve as ideal generator starting systems as they do not need separate battery charger, and therefore no recurring cost."
Mr Prasad said: "HBL being a player in design and development of batteries for aviation, defence and communication sector, plans to continue its focus in this area. It has no plans to address the growing automotive industry, where it is a high volume and low margin stiff competition sector. However, we have forayed into bus batteries, under testing for last one year. Based on its success, we are in talks with several road transport companies to expand their usage."
HBL Nife has charted out an expansion plan, which includes investments of Rs 70 crore in three manufacturing plants in Andhra Pradesh and raising Rs 150 crore through FCCB (fully convertible bond) issue.
"The Vizag plant for alkaline batteries will be completed by 2006 with an investment of Rs 20 crore. We have received enquiries from several companies from the US and the UK for manufacturing opportunities," Mr Prasad said.
The Rs 50-crore Vizianagaram project is set for commissioning by 2007. The expansion would be funded through debt and negotiations are under way with SBI and IDBI.
Another plant is planned at Hardwar.
In addition, the company hopes to complete the process for the FCCB offer to raise around Rs 150 crore by year end.
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