The elevator business of ECE Industries is up for sale. The B K Birla group company has appointed ICICI Securities (I-Sec) to find out a buyer for the elevator business.
Confirming the development, top sources in the B K Birla group said I-Sec is in talks with foreign as well as Indian elevator major to clinch the deal.
The sources, however, declined to the name the companies with whom the talks were on. "Since I-Sec is in charge of finding out a suitable buyer, we would not like to comment on the name of the interested parties," they said.
Industry experts said the proposed sale was expected to bring in nearly Rs 60 crore to the Birla company. The elevator divisions, located at Ghaziabad and Budge Budge, recorded a turnover Rs 40.35 crore from selling 708 units in the financial year ended March 31, 2000. The divisions have an installed capacity of producing 800 units of elevators a year.
The company, which has a technical collaboration with the Japanese major Toshiba Corporation, has introduced several new products over the past couple of years. These are variable voltage variable frequency (VVVF) and hydraulic elevators, high performance automatic door operator-PKS7, automatic rescue device (ARD) and car parking elevators.
The proposed sale, if goes through, will be the second attempt by ECE to hive off units in the past two-and-a-half years. In October 1999, ECE sold its electric lamp manufacturing unit at Sonepat to German lighting major Osram for over Rs 45 crore.
But the proposed sale of elevator business is different from hiving off the electric lamp division. ECE still continues manufacturing incandescent bulbs at another division, but after the proposed sale of elevator unit, ECE will completely withdraw from the business.
In addition to incandescent bulbs and elevators, the company manufactures switchgears at Budge Budge, AC-DC converters at Chennai, meters at Hyderabad, power distribution transformers at Sonepat and transformers at Visakhapatnam.
According to experts, ECE's proposed exit from elevators would offer an entry opportunity to foreign companies interested to set up shop in the country where the elevator business is growing.
Nearly 60,000 elevators in the country, which represent almost 20 per cent of the installed numbers, require upgradation or replacement due to their average age of 15 years, an expert said.
