Revathi Equipment Limited (REL) is in the process of shifting its Construction Equipment Division (CED) at Gummidipoondi, near here, to its mother plant at Coimbatore as part of cost-cutting measures.
Talking to The Hindu , REL Company Secretary, M. N. Srinivasan, said: “The idea of shifting to Coimbatore is meant to shrink our fixed costs and become more competitive. Necessary steps are being taken to dispose off fixed assets of nearly Rs.20 crore. We have not fixed any timeframe for the complete shift and we are looking for a suitable buyer. We have already downsized the staffers at Chennai.”
REL, manufacturer of drilling equipment and accessories for mining, construction and water well applications, had invested Rs.30 crore in Gummidipoondi unit in June 2009 and it was manufacturing equipment for preparation, transportation and placing concrete. Drills are being manufactured at Coimbatore. Executive Chairman, Abhishek Dalmia, in his letter to the shareholders, said that they started the process of restructuring the balance-sheet to bring it back to health. According to Mr. Dalmia, the sale of land was expected to bring down the company’s debt from Rs.100 crore in 2008-09 to about Rs.50 crore by the end of next fiscal. (Currently, the company has short-term debt of Rs.74.86 crore.)
