Crompton Greaves is planning to make an exit its Canadian power transformer plant, to cut losses in its foreign business.
The transformer factory in Canada contributes about 3% to the company’s total sales but made a loss of $10 Mn in FY13. Earlier this year, it restructured its Belgian plant.
The Canadian facility is running at low utilizations and there are manufacturing design issues too. The company sees continued losses for the facility through the next few quarters, thus deciding to sellout the plant or shut down completely.
The Canada plant was acquired by the Pauwels group of Belgium in 1994, which was later acquired by Crompton Greaves in 2005, thus bringing the plant into its fold.
The underperformance of the international business is affecting the financial results of the company, resulting in a decline in overall profit.
Crompton Greaves earns 55-60 per cent of its revenue from its Indian parent, and the rest from foreign subsidiaries across Europe, the Americas and Indonesia.
Avantha Group’s Crompton Greaves Limited is a pioneering leader in the management and application of electrical energy, with a presence in over 10 countries.
Its diverse portfolio ranges from transformers, switchgear, circuit breakers, network protection & control gear, project engineering, HT and LT motors, drives, lighting, fans, pumps and consumer appliances and turnkey solutions in all these areas.
The company’s business is divided into three primary segments: The power business contributes the most (63%) to revenue, followed by consumer products (20%) and industrial systems (13%).
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