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Gillette shuts Duracell plant, 175 take VRS

BS Corporate Bureau

Bogged down by an uncharged domestic market for alkaline batteries on the one hand and shrinking exports on the other, Gillette India has closed down its alkaline battery manufacturing plant at Manesar in Gurgaon, and will instead resort to imports.

In the process, most of around 175 workers at the Duracell India plant have been given voluntary retirement, which the company claimed has been accepted by the employees. A few employees have been relocated.

The Manesar plant will now be put up for sale, to either overseas subsidiaries of The Gillette Company, US, or other international players who may be looking at setting up a base in India or in neighbouring countries.

A capital investment of around Rs 550 million has been made into the greenfield facility since its inception in 1996.

The decision was taken following the observation by a fact-finding team that the Duracell manufacturing operations had become non-viable.

The review and implementation committee was appointed by the board of directors of Gillette India at its meeting on December 21, 2001, with the mandate to prepare an independent report on the company's non-grooming businesses in India, the statement added.

Gillette India's director (Legal) Vijai N Mathur said that the capacity utilisation at the plant was only around 50 per cent.

The unit has a capacity to produce 140 million units of alkaline cells (AA) every year. But while only 70-75 million units were being produced 85 per cent of these were being exported. Only 7-8 per cent of the produce was being sold in India as the market for alkaline cells in India is extremely small and is not growing.

Alkaline cells constitute only around 1 per cent of the total battery market in the country, with dry cells constituting the maximum.

Mathur said that while exports had dropped in recent months due to a slump in demand in a recession-hit global market as well as increasing competitiveness, manufacturing for a low-volume domestic market alone was no more viable.

The decision comes barely a year after Duracell India was merged into Gillette India following a global acquisition in 2000.

Meanwhile, in order to strengthen the financial position and meet long-term business plans, The Gillette Company, US, has announced that it would infuse funds voluntarily into the Indian arm by way of capital grant. The details of the capital grant infusion are still being worked out, according to a press statement.

Gillette India also owns the Geep brand which it acquired in India, and is a major player in the grooming -- toiletries and shaving products -- businesses. It also has a presence in the oralcare segment with toothbrushes, etc.

Gillette India reported a turnover of Rs 5.36 billion and a net profit of Rs 264.2 million for the 12-month period ended December 2000. For the nine-month ended September 2001, the company reported a turnover of Rs 3.54 billion. The equity capital is Rs 325.9 million. Mathur refused to comment on the calendar performance.

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