Calcutta, Sept. 22: R. P. Goenka-owned Harrisons Malayalam has sold Boyce Estate — one of its rubber estates in Kerala — for Rs 33.3 crore to pay down a portion of its high-cost borrowings of Rs 80 crore.
“We have sold the estate in keeping with the trend of looking dispassionately at any business to turn it profitable. The estate has fetched a good price. A non-resident Keralite businessman has bought over our estate,” chairman Sanjiv Goenka told The Telegraph.
However, he could not say if the sale proceeds would go into group-company Ceat’s kitty, which recently announced plans to merge the rubber business of Harrisons Malayalam with itself.
“The demerger scheme is lying with Mumbai High Court and Kerala High Court. So we cannot say what will happen. But the basic idea is to reduce the liabilities of the rubber business and make it profitable,” Goenka added.
Harrisons Malayalam, which also has interests in tea, engineering and biotechnology, has 13 rubber estates. Out of them three are in the Ranni Valley, four in Mooply Valley and six in Venture Valley of Kerala. The total planted area is 9,000 hectares. The firm has 11 rubber factories. The company’s current production is 10 million kgs per annum, with an average yield of over 1400 kgs per hectare.
The Boyce Estate employs 400 people. The rubber estate would be transferred as a functioning entity along with all its employees, a letter to the National Stock Exchange said.
Harrisons Malayalam suffered a net loss of Rs 9.92 crore in 2002-03. The interest outgo was Rs 9.82 crore. In the first quarter ended June 30, 2003, the company suffered a loss of Rs 2.21 crore and the interest outgo was Rs 2.84 crore.
Industry analysts attribute this dismal performance to the depressed tea and rubber markets.
Rubber prices have remained very low over the last five years. All producers, big or small, are suffering alike. The crisis began with the collapse of the south-east Asian currencies and low demand in recent years has added to it.
Last year, there was evidence that no floating stock was available in the country but the near-recessionary state of the economy prevented any improvement. The government’s efforts to fix a floor price and ban duty-free import of rubber against advance licenses did not help.