Eveready Eyes Third Slot In Tea Segment

Eveready Industries India Ltd, the flagship of the B M Khaitan-controlled Williamson Magor group, has set itself an ambitious target of being the number three in the packet tea segment in the current year. This was stated by chairman B M Khaitan at the sixty third annual general meeting of the company yesterday.

Eveready has planned to sell 12,000 tonne of packet tea under the brand, Tez, in the current year. "But we should sell 15,000 tonne to break even," Khaitan said.

During the previous year, the sales of packet tea under Tez and Premium Gold achieved 100 per cent growth. Khaitan expressed his concern that the excise duty on packet tea for packs of over 100 gm will prove to be detrimental to the growth of the branded tea industry.

 

Addressing the shareholders, the Eveready chairman said the company's financial performance in 1997-98 has reflected the synergy achieved in combining the strengths in the two businesses of batteries and flashlights and tea.

"The strengths that we derive from our competitiveness in the agricultural sector and large distribution network enable us to direct our future efforts towards the building up of the consumer products business," he said.

Eveready's joint venture with EBC (India) Company Ltd, a wholly owned subsidiary of the US-based Ralston Purina Overseas Battery Company Inc, for miniature batteries got off to a good start during the year. However, the company is facing difficulty at its Srinagar battery plant.

During 1997-98, Eveready has taken several steps for restructuring its borrowings with a view to reducing the interest burden. At the same time, additional funds were needed for financing capital expenditure for modernisation, expansion and acquisition of two new tea estates.

"Despite mobilisation of additional funds, interest cost has actually come down as a result of better restructuring of loans, effective money management and tighter control on working capital," Khaitan pointed out.

The chairman said that the trend of improvement in both production and sales of the company's products will continue this year. Last year, its sales improved by 20 per cent, profit before tax improved by 98 per cent and net profit increased by 227 per cent.