Balmer Lawrie Focussed on Organic Growth across Its Business Units

Diversified PSU Balmer Lawrie & Co. Ltd. is banking on organic growth across all its six strategic business units (SBUs). “We are looking at organic growth in all SBUs since inorganic growth is not possible as the funds available for buy-outs are limited,” emphasised the company’s Chairman and Managing Director Mr. Prabal Basu.

He revealed that the net worth of the company was Rs. 1,000-crore and only 15 per cent of that could be used for funding acquisitions. “This amount of Rs. 150-crore is too little for buy-outs,” he noted.

Almost a debt-free company, Balmer Lawrie is also not too keen on leveraging, Mr. Basu said. “At present, all the SBUs are on growth path. We are shortly going to commission one industrial packaging (IP) plant (steel drums) at Gujarat at a cost of Rs. 25-30 crore,” he said. The company is facing challenges at the Kolkata plant of its IP business, owing to lack of demand from the private sector and as government orders were restricted only to the MSMEs, and not the PSUs. Due to lack of industrialisation in the state, there is dearth of private orders. “We are looking for newer product lines at the plant,” he said.

The container freight stations (CFS) business of the logistics SBU has also been suffering because of the Centre’s directive of direct delivery to import points from the plants, the official said. “This has led to a dip in the CFS business volume by 40 per cent leading to a loss of Rs. 14-15 crores. Despite this, the logistics SBU has contributed maximum to the turnover,” Mr. Basu said.

Balmer Lawrie has begun operations of a temperature-controlled warehouse. “If this becomes successful, we will replicate this by several numbers,” he added.