Financial Daily from THE HINDU group of publications
Monday, May 27, 2002
Industry & Economy - Disinvestment
Balmer Lawrie sell-off in two phases finalised
Balaji C. Mouli
NEW DELHI, May 26
THE Government has finalised the sell-off plan for Balmer Lawrie Ltd.
It is set to seek the approval of the Cabinet for a proposal involving the hiving-off of four businesses into separate companies for which strategic partners will be roped in.
According to the proposal, once the four businesses are sold off by around December, Balmer Lawrie Ltd with the remaining businesses such as packaging, grease and IT services can be privatised.
The four businesses for which strategic partners will be invited are travels and tours, chemicals, container freight stations besides tea blending and exports.
The Government expects to net around Rs 90 crore from the sale of the four businesses, according to the proposal.
Formerly a subsidiary of IBP Ltd, the company was hived off when the former was privatised early this year. During the IBP privatisation process, the Government had decided that the proposal to privatise the 135-year old Balmer Lawrie Ltd would be put in place by June 2002.
In view of this deadline, the Government is seeking a revised schedule wherein the company will be sold only in December, prior to which the four businesses will be hived off and sold to strategic investors.
The Government holds 59.6 per cent in Balmer Lawrie Investments Ltd (a shell company), which in turn holds 61.79 per cent in Balmer Lawrie Ltd. This arrangement was put in place when IBP Ltd was disinvested. Balmer Lawrie's leather chemicals business was started in 1983 with a manufacturing unit in Chennai.
The company manufactures products such as synthetic tanning agents, etc, under brand names like Balmol, Balsyn, Balfin and Balwet.
The tea business caters to a wide market base, addressing both conventional and sophisticated markets.
Tea packaged by Balmer Lawrie is sold both under its brand name like Indian Summer as well as others. It is associated with famous retailing chains in England such as Harrods and Selfridges.
The container freight business is mainly carried out of its three stations at Chennai (40,000 sq. m.), Kolkata (37,000 sq. m.) and Mumbai (80,000 sq. m.). Balmer Lawrie has a covered warehouse, critical equipment, global tracking systems, etc.
The industrial packaging business manufactures mild steel barrels and drums.
The grease division sells grease under the brand name `Balmerol' and has five manufacturing facilities having a capacity of 80,000 million tonnes per annum.
The company recorded a turnover of Rs 730.64 crore and a profit after tax of Rs 8 crore for fiscal 2001-02.
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