October 6, 2022: India’s Amara Raja Batteries is proposing to integrate the plastic battery components business of a key supplier, Mangal Industries, with its own battery manufacturing operations, the group told investors on September 26.
Amara Raja said it already receives Mangal’s entire output of plastic components for batteries and the proposed deal would simplify operations and improve efficiencies.
The move would also boost control over raw materials supply at a time when Amara Raja is expanding its operations, the company said.
Mangal, which started operations in 2004, was founded by Amara Raja patriarch Ramachandra Galla, who stepped down as chairman of the battery group last year.
The Andhra Pradesh firm is wholly-owned by RN Galla Family Private Limited and will continue to manufacture a wide range of other products including automotive components.
The plastic battery components business has around 150 injection moulding machines, which would be taken over by Amara Raja along with their facilities, buildings and land.
Details of what Amara Raja called the proposed “demerger” of the components unit are being presented to shareholders and regulatory authorities and the deal should be completed within 12 to 14 months.
Amara Raja’s executive director of automotive and industrial batteries, Harshavardhana Gourineni, said the move would strengthen his company’s control of the supply chain and “augments our battery recycling initiatives”.
“It also helps us in improving margins by better utilization of manpower and reducing logistics costs.”
Meanwhile, Amara Raja chairman and MD Jayadev Galla (pictured) said the group is looking for a technology partner to support its move into the production of lithium ion battery cells.
Galla said on May 20 that his company would “fast track” its development of a customer qualification plant for lithium cells while also building on its lead battery foundations.
“We are very bullish about the future of lead acid batteries. Even with the transition going from internal combustion engines to EVs taking place,” he said.