Kolkata, July 27 (IANS) Battery maker Exide Industries Ltd is eyeing a larger share of the unorganised battery market after implementation of the Goods and Services Tax (GST), a top company official said on Thursday.
According to the official, the GST provides a unique opportunity for organised players. Small-scale sector earlier was mostly not paying taxes and the differentiation of prices of the batteries of organised and unorganised players in the industry was high.
“Following GST implementation, it is almost inevitable that everyone will have to pay taxes. As a result, organised sector will get substantial share out of the unorganised sector,” Exide’s MD and CEO G. Chatterjee told shareholders at the 70th Annual General Meeting.
“The company has strategised itself to get this opportunity by putting its Dynex brand, a low-cost battery to penetrate the unorganised market. We are targeting small-scale manufacturers and distributors to distribute this battery and thus increase our market share,” hew added.
Chatterjee said organised market comprised 65-70 per cent of the battery market, while the unorganised players had a share of 30-35 per cent. “The replacement battery market size will be close to 20 million a year, including organised and unorganised.”
He said the GST benefit, as per the company’s calculations, came to around 1.7 per cent. “On the weighted average basis, the battery prices have come down by 1.7 per cent. So, the net benefit of GST is neutral.”
During financial year 2015-16, the battery maker had chalked out a cumulative Rs 1,400 crore investment plan. In the first phase, with an investment of Rs 700 crore in 2016-17, it commenced its new Haldia plant, which manufactures next-gen automotive batteries using new punched grid technology.
“The balance Rs 700 crore will be distributed among the rest of the manufacturing plants in 2017-18. We will be introducing robotics technology to meet global standards,” its latest annual report said.