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The storage Batteries Industry consists of two segements - automotive
and industrial. The major players in this industry include Exide
Industries, Amara Raja Industries, Amco and Tudor India.
With relaxation of import duties and the recent removal of quantitative
restrictions, Indian Companies are facing the threat of cheaper
imports.
S Ramachandra, Executive Vice President (Automotive and
Industrial Batteries), Amara Raja Batteries Limited (ARBL), speaks
about the current trends in the industry.
What is the size of the market for the automotive
and industrial batteries segment in India / South India?
The total Indian battery market is estimated at close to
Rs 2100 crores.
 Out
of this the industrial battery market is estimated at around
Rs 860 crores which includes the VRLA (valve regulated lead acid)
battery market, which is estimated at around Rs 500 crores in the
current year. The telecom segment is the largest consumer of industrial
batteries followed by the railways. The power and UPS industries
are other key user segments.
The automotive battery business is estimated at around Rs
1200 crores, including OE (original equipment) and after-market
or replacement market segments. The OE market is around 1.2
million units and the replacement market is around 5 million units
per annum.
Conclusive industry data on South India is not available.
To our best estimate, the market share of the South is about 20%
for automobile batteries and around 35% for industrial batteries.
What is the share of the unorganized sector?
The unorganized sector comprises the small-scale assemblers and
rebuilders, it is currently estimated to have a share of around
60-65% of the replacement market. This sector largely dominates
the tractor and commercial vehicle segments although in some areas
of the country they have a significant presence in the car and multi-utility
segments too
Your views on threat from imports and the
unorganized sector? What is Amara Raja doing to combat this
threat?
Last year there was an increase in imports from countries like
China, Japan, Korea and Bangladesh (3.6 million units and 1.9 million
units of automobile and industrial batteries respectively). These
batteries have a price advantage over batteries manufactured in
India as they escape the heavy duty on lead and other raw material
like separators and plastic in India.
 ARBL
being a member of Indian Battery Manufacturers Association (IBMA)
filed an Anti Dumping petition for uniform pricing against imports
from these countries. An interim order has been passed against
imports from Korea, China and Japan. Bangladesh, however has appealed
for a de-minimus status, which is under investigation. Our
products in the automotive and industrial sectors are technologically
on par with the best available in the world today and are also cost
competitive, if one were to allow for the higher incidence of duties
and taxes in India. We are confident that given a level playing
field, we have nothing to fear from imports.
With regard to the unorganized sector, strict legislation is required
to enforce environment sensitivity, so that unethical and hazardous
practices will eventually change to more organized forms of operation.
This should benefit the industry and consumers as a whole.
The process may take many years, but we are encouraged that a start
is being made. With greater levels of consciousness on these issues
as well as proactive government action, we feel we can make rapid
progress with a visible improvement in 2-3 years.
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