Nippo Batteries joint venture still open-ended

Tag : manganese di-oxide

Nippo Batteries’ intention behind selling torches is pushingthe sales of what energises them — dry cells.


M. Ramesh
Chennai, June 12 When Nippo Batteries sells torches, it is with‘an interior motive’.
Last year, the company, which is a joint venture between Indianpromoters (Dr Obul Reddy) and Matsushita Electric (the owners ofthe Panasonic brand), sold 14 lakh torches for Rs 12 crore. It madeno profit on the sales. This year, the company intends to sell moretorches, but again there may not be any profits in the ‘torchbusiness’.
But that is no cause for worry because, Nippo Batteries’intention behind selling torches is pushing the sales of whatenergises them — dry cells.
The ‘dry cell’ industry in India is going through toughtimes with the rise in input costs. As much as 30 per cent of thecosts are of zinc — Zinc prices had softened in the fourthquarter of the year before last but have since risen. Prices ofother inputs such as natural manganese di-oxide and electrolyticmanganese di-oxide have risen from Rs 15,000 a tonne to Rs 24,000and from Rs 45,000 a tonne to Rs 55,000, respectively.
The market for dry cells slid last year by 0.68 per cent, but NippoBatteries managed to raise its sales by 2.93 per cent to Rs 339crore, against Rs 316 crore in the previous year. The company madea net profit of Rs 16 crore compared with Rs 6 crore in 2006-07.
In April, Daiwa Securities SMBC, a Japanese FII, picked up 9.41 percent stake in Nippo Batteries, buying the shares from MatsushitaElectric.
Before the transaction, the Indian promoters and Matsushitatogether had 84.4 per cent stake (44.4 per cent with the Indianpromoters).
The promoters’ stake needed to be brought down to 75 percent, as per the company’s listing agreement with the stockexchanges. Matsushita, which has another company in India, (NovinoBatteries, in which it has a majority holding,) sold off 9.41 percent to Daiwa Securities. The question now is whether Matsushitawould continue to be a partner of Nippo Batteries or not. Thequestion is still open, though the Indian promoters say that theyhave received no indication from the Japanese partner to the effectof wanting to exit the company. Related Stories:
Nippo Batteries Q3 net rises four-fold

Stories in this Section
PSL wins another order from GAIL Permionics bags Vizag Steel order Rs 117-cr orders for Metso Ranbaxy buy may hit generic drugs supply Why Ranbaxy Labs stock is falling? IOC plans mini liquefaction plants to exploit gas from marginalfields TI Cycles launches ebikes Farnell Electronics to establish innovation laboratory SRF commissions wind project IFGL Refractories to buy German co for €7 m Consolidated Const to pick up 40% stake in Dubai firm Arvind brand portfolio plans scupper Diesel jt venture Stamp of honour General Motors developing gas variants for 3 models Nippo Batteries’ joint venture still open-ended L&T increasing global play to hedge market risk Hyundai i10 exports cross 1 lakh units