The B K Birla flagship Kesoram Industries Limited will close down the oil mills and extraction division of Bharat General Section at Malkapur in Maharashtra, and also hive off the refractory division near Asansol in West Bengal to concentrate on core businesses.
"Our company depends mainly on cement followed by tyres and rayon businesses, which were major contributors to profit over the past couple of years, including the last fiscal. We are planning to come out of the small and loss making businesses," Kesoram chairman B K Birla said in Kolkata on Thursday.
As part of this strategy, the board has recently decided to close down the Malkapur unit and sought permission to this effect from the government, he said.
"We have also decided to go for restructuring of the sick businesses like the refractory division and will hive it off," Birla said.
He said the company acquired Bharat General in 1945 and made substantial profits but with competition over the past couple of years it has became unviable; the case with the refractory business was similar.
The company suspended the work at its refractory unit from February, 2002 and as such production during the last fiscal was nil, he said.
Malkapur division continued to perform unsatisfactorily due to lesser crops of cotton and soyabean, resulting in higher raw material cost. "The situation was further aggravated by the higher wages and energy cost not being compensated by rates in sales realisations and reduced export demand," he said.
