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| Southern Batteries plans expansion |
| Raghuvir Badrinath / Chennai/ Bangalore Oct 07, 2011, 00:36 IST |
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Southern Batteries, the Bangalore-based Rs 300 crore industrial battery manufacturer, is readying a Rs 180 crore expansion to foray into the highly-competitive automotive battery segment. The company which has manufacturing plants at Jigani industrial belt on the outskirts of Bangalore, is actively readying its new greenfield plant which will focus on the automotive battery segment, dominated by the likes of Exide and Amara Raja.
Southern Batteries CEO, Manikantan R told Business Standard that even though the automotive battery segment is highly competitive at the OEM (original equipment manufacturer) segment for a new player to get a foothold, there is enough opportunities in the replacement market.
“To start with, we will focus on this huge replacement segment and will first have our network in South India. According to our research, the replacement market in South India is worth in the range of Rs 700-900 crore and we would like to have 5 per cent share, an year after we start during April 2012,” Manikantan noted. According to him, the investment of Rs 180 crore for the new plant will be from internal accruals and debt from banks. Southern Batteries, according to Manikantan, will also be looking to tap the OEM segment a few years down the line after they establish themselves in the automotive sector. “It is highly competitive and the margins are pretty thin.
However it is a good business in the long run with assured sales and we will surely tap the sector eventually,” he noted.
Southern Batteries, which supplies industrial batteries under the brand Hi-Power, has been in this business for the past 25 years and has been specialising in the manufacture of low maintenance free lead acid tubular batteries catering to telecommunication, uninterrupted power supply (UPS) segment, windmill, mobile towers, Railways, solar industries among others. “We have major names such as the Indian Railways, Tata-BP Solar, ABB, BHEL, Wipro, among others as our customers and we are expanding the scope of relationship with them,” Manikantan added.
The company which has been active in the industrial battery segment has also rolled out aggressive expansion plans to directly tap the retail sector in South India. “The inverter market in Kerala is a good one which we are targeting and sales has been quite good so far,” he detailed.
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