Talbros Automotive Components has decided on partial strategic disinvestment of its non-core materials business assets. The same is being sold to the Indian Affiliate of Interface Performance Materials, USA who are pioneers & leaders of gaskets materials worldwide. Further, the company has entered into a raw material sourcing agreement with them. Under this agreement, Talbros shall source various Gasket raw materials from Interface’s Indian manufacturing unit.
The disinvestment will help Talbros achieve two important things. First, enable Talbros to source materials locally leading to foster turnaround time in executing client orders. This will result in reduction of imports by 15% thereby, reducing the working capital requirements and the exposure to foreign exchange fluctuations; and second, savings on fixed cost.
The total savings expected to accrue from the strategic disinvestment will be in the range of Rs 7-10 Million per annum. The savings in operational costs, reduction in row material inventory and working capital investments will reduce the interest burden and therefore, enhance the profitability of the company.
