The Hindu : Business : Bata hopes to do better

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Friday, Dec 03, 2004

Business

Business

Bata hopes to do better

The Managing Director of Bata India, Stephen J. Davies, displaying new products at a press conference in New Delhi on Thursday. — Photo: Sandeep Saxena

NEW DELHI, DEC. 2. Bata India will post net profit in 2005 and wipe out entire accumulated losses in the next two years besides introducing a voluntary retirement scheme as part of strategy to become a leaner organisation.

The footwear firm would also post a 12 per cent rise in sales turnover at Rs. 840 crores in 2005 over an estimated Rs. 750 crores this year, its Managing Director Stephen, J. Davies, told reporters on the sidelines of a news conference.

"Our topline will be driven by the `Power' range of shoes, which is witnessing an increase of 15 per cent on quarter,'' Mr. Davies said introducing a new range of the brand.

The Indian arm of the Toronto-based Bata Shoe Organisation posted a net loss of Rs. 26 crores for the year ended December 31, 2003 on a total income of Rs. 716 crores.

The company hoped to wipe out Rs. 40 crores of accumulated losses by 2006 and was planning to introduce another round of VRS in 2005, which should be availed of by about 700-800 employees, the Bata India Deputy Managing Director, P. K. Nag, said.

India's biggest shoe-maker had introduced three rounds to VRS this year, which was aimed at 1,500 to 1,600 personnel.

At present, the company has a workforce of 10,000 employees.

Bata India has five manufacturing units across India with a combined capacity of 40 million pairs annually and sells 60 million pairs every year with the balance 20 million pairs being imported from neighbouring countries like China.

Asked about the company's rights issue to fund restructuring, Mr. Davies said, "it has been approved by the board.''

The company, which is in the process of restructuring its retail business and refurbishing its 1,600 stores across India, has spent Rs. 12 crores on the exercise besides investing in technology at its plants in 2004.

"Our restructuring exercise involves ways and means to increase our topline and bottomline. Bata India had been a high cost structure company,'' Mr. Davies said.

PTI

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