Kirloskar Electric hopes for turnaround

By Our Staff Reporter

KOLKATA, APRIL 1. Kirloskar Electric Company (KEC) is negotiating with a few overseas companies to acquire their uneconomic product lines. The company has also submitted prototypes of certain traction components for the perusal of General Motors. The components, if selected will be manufactured and supplied by KEC.

Addressing a press conference here the company chairman cum managing director Mr. Vijay R. Kirloskar, said the company had taken over the technical and sale rights of large (1 MW and above) generator sets from Toyo Denki of Japan. Toyo was finding production of the same in Japan uneconomic.

As per the agreement, KEC holds the right to manufacture and sell the Toyo Denki gensets all over the world. While KEC on its own will procure orders, those received by Toyo also will be passed on to KEC. The latter manufactures the gensets at its Bangalore facility.

It may be mentioned that KEC set up the aforesaid facility in 1993-95 at an investment of Rs. 150 crores in expectation of over 20 per cent demand growth. The expectation was belied and the investment proved a blow to KEC's bottomline bringing the company into the red in 1998-99 and eventually eroding the entire reserves.

KEC is expecting a loss of Rs. 50 crores this fiscal on a turnover of Rs. 230 crores, but is hopeful of making a cash profit in the next fiscal. ``We will take another couple of years to wipe out the Rs. 100 crores of accumulated loss'', Mr. Kirloskar said putting a similar timeframe to be back into the dividend list.

The company has adopted several cost cutting measures including reduction in manpower through VRS.

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Section  : Business
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