Geo-political tensions may pose challenges for key business units: Balmer Lawrie

Kolkata: Diversified PSU Balmer Lawrie said that geo-political developments around the world like the Ukraine-Russia conflict might pose key challenges for a few of its business units, namely industrial packaging (IP) and logistics services (LS).

According to the outlook shared by the firm, the Russia-Ukraine situation continues to weigh on the global economy disrupting supply chains and adding to inflationary pressures.

In its annual report for 2022-23, which is the latest, the company said that for IP the prices of steel was volatile due ongoing war between the two countries.

However, owing to the government's intervention by levying duty on steel exports, the prices have started to stabilise, it said.

The PSU has eight business units, namely industrial packaging (IP), logistics (infrastructure, services and cold chain), travel and vacations, greases and lubricants, chemicals and refinery and oilfield services (ROFS).

The company, it said, is expected to gain significant growth in the coming years with the biggest drivers being chemicals, transformer oils and lubricants segments. The company also plans to expand aggressively in exports markets for its IP division.

It said owing to the presence of a large number of unorganised players with low overheads and low entry barriers will continue to pose area of concern for the business unit.

The other business unit which will face challenges in the current year due to geo-political tension is the logistics services business unit. The freight forwarding activity of the business unit was marginally impacted but for a short-term period, the company said.

During the last fiscal, the IP segment generated a revenue of Rs 730.62 crore for Balmer Lawrie, while LS segment revenue was Rs 548.04 crore. The total revenue of the company during the last fiscal was Rs 2383 crore.