CHENNAI: The board of directors of Amara Raja Batteries, on Monday, approved an investment of Rs. 88.2 crore to increase the automotive battery capacity by 50 per cent from 3.6 million units to 5.4 million units annually. The expansion will be completed by the second quarter of 2008 financial year.

Company officials said the expansion would be funded by a combination of internal resources and debt. The company had not yet decided on the kind of debt funding — rupee finance or extern commercial borrowing, they said.

With the completion of the proposed expansion, the company would have more than trebled its capacity since January 2005. The current expansion would be the single largest investment made in the automotive battery business by the company. The company's aftermarket retail network has expanded to over 135 franchisees from 125 at the end of the previous fiscal. Exports would continue to be the focus area.

In a release, Jayadev Galla, Managing Director, said "We have been experiencing high growth in our automotive battery business and extremely successful in expanding OE (original equipment) business, aftermarket replacement and automotive exports. We have been consistently scaling up capacity to gear ourselves to tap the growth we foresaw a few quarters back. We need this expansion to meet market requirements in the next financial year. Once this expansion is completed, the turnover should exceed Rs. 1,000 crore."

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