The Hindu Business Line : Exide buys controlling stake in Leadage Alloys

Kolkata, June 18 Exide Industries on Wednesday announced acquisition of 51 per cent interest in Bangalore-based lead smelter Leadage Alloys India Ltd for an undisclosed sum. The board of directors of Exide had previously approved a maximum investment of Rs 35 crore towards such acquisition.

Having acquired Tandon Metals Ltd in October 2007, this is the second lead smelting unit in which Exide Industries has taken a controlling interest in. Lead constitutes approximately 70 per cent of the material cost of lead-acid batteries manufactured by Exide.

While a press release issued on Wednesday is silent on details of the latest acquisition, company sources said that together the smelters are expected to have a combined lead production capacity of 6,000 to 7,000 tonnes a month, nearly half of Exide’s average monthly requirement of 11,000-12,000 tonnes.

While plans are afoot to expand the capacity of Tandon Metals from 2,000 tonnes to 3,000 tonnes a month, a similar project may be taken up in Leadage Alloys in due course.

Price control

Since a larger part of the smelter capacity would be used for recycling the lead in used batteries, the acquisitions will help Exide achieve greater control over the price of its critical raw material.

Recycling of lead would also help Exide conform to the Batteries (Management and Handling) Rules better. The rules make it mandatory on the lead-acid battery makers to collect used batteries to prevent environmental pollution.

“Our own lead smelting units will not only help us achieve greater self sufficiency in this critical raw material in the long run, it will also help us have greater control over recycling used batteries that we buyback from the market as part of a regulatory framework for storage battery manufacturing,” said the press release, quoting Mr T.V. Ramanathan, Managing Director and CEO.

More Stories on : Mergers & Acquisitions | Automobile Components

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page