Siemens Plans To Sell Calcutta Unit Assets

Siemens, the Indian arm of the German engineering giant, after having come out of the red, is planning to sell the assets of its Calcutta unit, one of its largest.

The move is part of the engineering company's restructuring drive, and will bring down the cost of operations, while augmenting capacity utilisation.

The move is a consequence of the low-demand scenario which has led to high under-utilisation of capacity at the unit.

J Schubert, managing director of Siemens, said the company was willing to sell the assets, especially land, in parts. "If we get a good partner, we are also ready to jointly manufacture some products in Calcutta."

Siemens has an employee strength of over 200 in the unit, Schubert said.

The Calcutta unit, which currently produces electrical panels and other engineering products, has not been achieving full capacity utilisation over the past few years owing to certain problems with small scale industries in Calcutta.

However, Schubert did not elaborate on the exact problems faced by the company in Calcutta that has a capacity to manufacture 10,000 electrical panels per annum.

According to him, there has been no political interference in the operations of the company and Siemens is getting good support from the state government.

Schubert said the company is also planning to frame new strategies to resolve certain issues in its manufacturing units at Kalwa and Nashik in Maharashtra.

The implementation of new and effective work measurement techniques helped save costs. Through this, major process improvements were implemented across all the units in Kalwa, Nashik and Aurangabad, resulting in overall enhanced productivity.

Special attention was paid to material costs, which came down owing to a focused approach towards procurement and design adaptation. Besides, better asset management, in terms of inventories and receivables, substantially reduced the capital employed.

Siemens focused on the internal processes and the overall cost position to bring higher efficiencies in the deployment of its resources.

"The company will continue the ongoing voluntary retirement scheme (VRS) in its units across the country. Our aim is to become an organisation with more profitability, while continuing the focus on customers and new products," he added. As of September 30, 2000, Siemens had 4,342 employees, down from 4,604 employees in the previous year.