HMT may sell loss-making watch division

The iconic watch division of HMT -- the state-owned company that

reported staggering business profits with an 80 per cent share of the market in the 1980s -- has now run into bad times. It is contemplating selling its iconic watch division in order to try and turn profit figures around. HMT, which has posted very low turnovers since 1991, recorded a massive deficit of around Rs 200 crores in 2009-10 and currently has a debt of about Rs 1,300 crores to pay up.

The company’s watch division has been forced to steadily give up its market share to non state-owned rivals such as Titan Industries, with the government easing control on private enterprises over the last decade. HMT officials hope that the sale may help the company to cut losses and reduce debt. This is only a thought at the moment as the plans for revival will be finalized by March, says acting chairman G K Pillai, who has been appointed recently by the government to try and effect a turnaround after he set state-control Heavy Engineering Corp on the road to profit.

In his new role at the helm of the loss-making company, Pillai plans on focusing on fewer products and having an aggressive marketing strategy to promote the loss-making watch division. However, doing profitable business even in these new sectors may be difficult with increasing competition from overseas companies who are thronging the Indian markets. HMT’s dying watch sales are being pepped up with some recent large watch sales as part of custom- made corporate orders such as Indian Oil Corp, West Central Railway in Jabalpur, MOIL in Nagpur and state-run ordnance factories in Ambajhari, Nagpur and Kanpur. Having started manufacturing watches in 1962 in collaboration with Japan’s Citizen Watch Company, HMT has resorted to selling land over the last decade, but even that seems too little too late for the company.