November 22, 2008

Exide buys 51% stake in Leadage Alloys

ET reported that Exide Industries has picked up a 51% stake in lead smelting company Leadage Alloys India Limited for INR 34 crore. The acquisition comes on the heels of Exide Industries’ buyout of another unlisted lead smelting company Tandon Metals s in October 2007 for INR 25 crore.

Since global lead prices have been on an upswing, the two acquisitions are expected to help Exide increase its use of recycled lead and lead alloys for making storage batteries. And this would, in turn, reduce the company’s dependence on imports of lead.

Mr TV Ramanathan MD of Exide Industries said that "The company owned lead smelting units will not only make Exide self sufficient in the long run, it will also help the company have better control over recycling of used batteries that they buy back from the market as part of regulatory framework for storage battery manufacture."

Mr PK Kataky director automotive of Exide Industries said that "This investment in our own smelters is not just a backward integration project for Exide. It is part of our commitment to the environment, whereby we will have better control over disposal of used batteries and plastics."

Meanwhile, Mr T Arun Kumar CEO of Leadage Alloys India said that the new partnership will result in significant synergy for both parties given the fact that the entire cost-efficient facilities of Leadage get leveraged by Exide to meet its diverse lead and lead alloy requirements.