Balmer Lawrie Eyes Alliances To Boost Sbus

In an effort to strengthen the 'outer-core' businesses of the company, the Kolkata-based conglomerate Balmer Lawrie (BLCL) has invited bids for partnerships from specialised companies for four of its strategic business units (SBUs).

The SBUs are leather performance chemicals, container freight solutions, tours (in-bound and out-bound) and tea blending & exports.

The company has formed a three-member high-power team headed by managing director P K Bishnoi to carry forward the entire process of finding suitable partners and decide on the nature of alliances.

"The primary aim of inviting strategic alliance partner is to add value to these businesses by providing larger basket of products and services to customers at competitive rates. If carried out successfully, this arrangement would open up tremendous opportunities for the four SBUs," P K Bishnoi said.

The common feature of these SBUs is that they are not present in the entire range of product or service chain and the strategic partner is expected to cement the weaklinks. For instance, in leather performance chemicals, BLIC is market leader in products such as synthetic fat liquors (SFL) in India.

However, it is weak in two other products synthetic tanning agents (syntans) and leather finishes. The company would like to forge alliance with companies strong in those categories to develop the product indigenously.

"The alliance could be in the nature of product sharing as well. Some companies could be strong worldwide but does not have presence here. We could market their product syntans and finishes and in turn they could market SFL internationally," Bishnoi said.

Being a capital intensive business, the requirement in container freight solutions, is more of capital than expertise. Balmer Lawrie has one container freight terminal (CFT) each at Kolkata, Mumbai and Chennai. It is looking to expand into the northern region of the country riding piggyback on partner by building more CFTs.

For tea blending and exports, the company is stuck at the middle and wants to move both up and down the value chain. It is only present in blending packaging and exports. It neither owns tea gardens nor has marketing network. It can make more than one alliances here to make both forward and backward integration.

For tours business, BLCL is looking to focus on tourism than travel as it has more potential to grow. "This would be a complimentary structure. We will take others' team in India while our team would be taken outside the country by them," Bishnoi said. BLCL might go for tourism development in future.

He said some national and multinational companies had shown interest in the proposals. He expressed hope the entire process would be completed by last quarter of this financial year.