Vedanta books ₹746 cr charge on shut smelter
Company explores using Sterlite Copper equipment at other locations
also announced a definitive agreement to form a joint venture with Dr Reddy’s Laboratories Ltd to bring nutraceutical brands to consumers in India and other agreed territories. Dr Reddy’s will hold 51% and Nestlé India’s 49% in the joint venture (JV) firm. Nestlé India will have a call option to increase shareholding to up to 60% after six years at a fair market value. Dr Reddy’s will continue to hold at least 40% of the shareholding after Nestlé India exercises its call option.
“The partnership will bring together a global range of nutritional health solutions as well as vitamins, minerals, herbals and supplements of Nestlé Health Science (NHSc) with the strong and established commercial strengths of Dr. Reddy’s in India,” Nestle India said in a statement.
Headquartered in Hyderabad, the new company will leverage the capabilities as well as services of the Nestlé Group and Dr Reddy’s. Select brands will be licensed by the two companies to the JV company.
Nestlé will license brands including Nature’s Bounty, Osteo Bi-Flex and Ester-C, while Dr Reddy’s will license brands such as Rebalanz, Celevida, Antoxid, Kidrich-D3, Becozinc in the nutrition, and over-the-counter segments. The company is expected to become operational in the second quarter of FY25.
Additionally, Nestlé India announced the launch of its premium coffee brand Nespresso that will be rolled out in the country by the end of 2024. The first Nespresso boutique will open in Delhi, before expanding to other key cities. This launch will bolster Nestlé India’s premium coffee offerings, it said.
Nestle beat estimates led by strong sales and raw material benefits, said Amnish Aggarwal, head of institutional research, Prabhudas Lilladher Pvt. Ltd. “Nestle has sustained strong growth in a tough environment due to lower product penetration in key categories and higher growth in rurban (small markets),” he said. However, Aggarwal said news of India’s food regulator probing infant nutrition brands, including Nestle India, over claims of added sugar may cloud returns in near term.
Vedanta Ltd has taken a final charge on its books on account of its shut Sterlite Copper plant and is exploring options to utilize the plant’s assets at its other locations after the Supreme Court dismissed the company’s special leave petition (SLP) to reopen the unit.
While the company plans to file a review petition before the apex court, it has taken an impairment of ₹746 crore on its books during the January-March quarter. The residual value of the plant on its books is what can be “conservatively” realized through the sale of the assets, a top executive at the company said.
“We are exploring legal options. At the same time, we are at the drawing board to look at how the asset can be utilized at the rest of our facilities,” Arun Misra, executive director of Vedanta Ltd, told on Thursday.
The equipment at the Thoothukudibased plant, like sulphuric acid plant, phosphoric acid plant, among other things, can be utilized at Vedanta’s numerous other manufacturing locations, Misra said.
“It’s not very difficult to relocate the facilities and make the best use of it. We will first look at the legal options. If all roads are closed, we will of course use the asset wherever it adds the best value to our current business,” he said.
The plant has been shut since 2018 after Vedanta’s application for renewal of Consent to Operate (CTO) for the plant was rejected by the Tamil Nadu Pollution Control Board in April that year. Since then, the company has moved the National Green
Nestlé also announced the launch of its premium coffee brand Nespresso in India by the end of 2024
2018 year when the Sterlite Copper plant was shut