New Delhi: Bajaj Electricals on October 10 said ithas decided to shut down from this week its bulbs and tube lights manufacturing unit at Kosi in UP, which originally belonged to a sick company registered with BIFR, citing "not even a remote chance" of improving operations.
The board of directors of the company at its meeting today reviewed the performance/operations of the GLS bulbs and tube lights manufacturing unit at Kosi, Mathura, Bajaj Electricals said in a BSE filing. This unit originally belonged to a sick company registered with BIFR and was purchased by the company in an open bid held by IDBI Bank, the operating agency for BIFR in 2012-13, it added.
"The company had put in substantial efforts to improve the operations, however, the same are not yielding the desired results and there is not even a remote chance of improvement therein on account of...various factors," it added.
The factors included declining demand for GLS bulbs and their phasing out in the wake of increased popularity of long-lasting and energy saving LED products; higher cost of fluorescent tube lights in comparison with competitors and declining market of the same, besides non-availability of and difficulty in retention of skilled manpower because of losses made by the unit.
Bajaj Electricals said the Kosi unit has also been suffering from under-utilisation of manufacturing capacity as is the case across the industry for GLS bulbs. The company further said the implementation of E-Waste (Management) Rule 2016 requires technology upgradation and calls for major investment in order to comply with stricter norms.
"In consideration of the above, the Board has decided to close the unit with effect from October 13, 2016," the filing added.
The Kosi unit widened its net loss to Rs 1.67 crore in 2015-16 from Rs 1.1 crore in 2014-15. Its total revenue in 2015-16 was at Rs 47.84 crore as against Rs 24.31 crore in 2014-15, the filing said.
