Voltas leases LPG business unit to Andhra Cylinders
Arijit De
Mumbai, Jan 20: Voltas, the Tata group company, has leased out its liquified petroleum gas (LPG) cylinder business to Andhra Cylinders. The move is a part of its plan to generate revenue from less productive assets.The company has also leased out a major portion of its huge office complex in Jamshedpur, Bihar, to other Tata group companies. Company sources say it plans to lease out more real estate properties. However, it has taken a decision not to sell any more of its real estate assets. The employees of the LPG division will now be deployed in the company's recently revamped office furniture division. Voltas entered into the two unrelated areas of LPG and moulded furniture with its acquisition of the Hyderabad-based Allwyn Ltd in the early 1990s. Voltas sources said: "The move is in line with our guiding principle to secure highest returns possible from our assets." The office furniture division has recently entered into a collaboration with Lista of Switzerland for manufacturing modular office
furniture. Company sources claimed that Voltas' office furniture business is growing rapidly. In the last fiscal, the LPG division produced 1.23 lakh cylinders on an installed capacity of 10 lakh cylinders. This was against 2.93 lakh cylinders produced in the previous year. The company, after posting its first-ever loss in 1996-97, is at present implementing a turnaround plan under the new managing director Nawshir Khurody. Under the plan, the two core areas of operation will be the cooling and refrigeration business and the engineering division, which is primarily a trading outfit. Its two other divisions, white goods and chemicals, both of which have been bleeding the company dry, are up for sale. At the same time, the company has what it calls `hidden reserves'. During the last fiscal, the company sold real estate properties to gross Rs 13.6 crore and another Rs 1.1 crore through sale of other fixed assets. It was only this `other income' that kept Voltas' losses down to Rs 16.7 crore.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
|
