Reconfiguring the Supply Chain at Xtra Power Energy Systems

By the end of 2012, India was viewed as the main battery producer in Asia. The domestic market had also witnessed huge growth in demand for these batteries due to growth in the industrial sector and the economy. The battery market in the country was estimated to be Rs. 200 billion (See Exhibit I for a diagram of the Industry structure). The organized and the unorganized sector each accounted for 45% of the market, while imports accounted for the rest.

According to industry observers, the market for batteries in India was growing at an annual rate of 25% and was expected to keep growing at the same rate till 2015. The market had been growing due to the increased demand for lead acid batteries, which accounted for a whopping 70-75% share of the market. Lead acid batteries were in high demand in India due to frequent power cuts, as only they were good at handling extreme temperature conditions such as power cuts for long durations. As of early 2011, the total estimated market for lead acid batteries was Rs. 17-18 billion.