Eveready Industries India Ltd (EIIL) has restructured its operations at its loss-making overseas company Uniross. It has merged the distribution activities of Uniross with the business of Powercell, which it acquired. Powercell operates as a separate division.
The Uniross acquisition was made by EIIL in July 2009 by buying an 80 per cent stake from Novener SAS at a cost of around Rs.65 crore. The B. M. Khaitan group company made its first overseas buy in the hope of getting a foothold in rechargeable battery markets in Europe, Southeast Asia and Africa.
It is now felt that the timing of the acquisition did not work well for Eveready. “It has been a tough acquisition and it is not making money for Eveready,” a source said, adding that operations at the marketing office just outside Paris (where Uniross is headquartered) had been downsized.
The Uniross' distribution operations have now been merged with Powercell, which was also an acquisition but one that is doing well. The entire manufacturing of the Uniross rechargeable batteries is outsourced to China. Another reason for the company to be affected is due to the shrinking market for alkaline rechargeable battery segment in Europe. For Eveready it made little sense to chase a scarce market, it was felt.
The company has been facing a major pressure on its bottom line, mainly due to increase in input costs which have been affected by the rupee depreciation.
Eveready Industries ended the third quarter of 2011-12 with a loss of Rs.4.84 crore against a profit of Rs.3.03 crore in the same quarter in 2010-11.
