::Welcome to VBC Group:: Company Profiles

The acronym “VBC” stands for Vizag Bottling Company

The VBC group, a reputed industrial house of Andhra Pradesh with more than three decades standing, is a professionally managed conglomerate.

In the year 1967, VBC Group started as a partnership firm in the name of Vizag Bottling Company to carry on the business of bottling and distribution of soft drinks from Visakhapatnam under a franchise agreement with Parle Exports Limited, Mumbai.

The partnership firm was converted into a private limited company in the year 1971 and subsequently into a public limited company in the year 1986. In order to reflect the diversified activities of Vizag Bottling Company Limited, the name was changed to VBC Industries Limited in 1987 and the company has set up a chemical division at Ponnada, Srikakkulam District of Andhra Pradesh to manufacture Ammonium Nitrate Prills and Nitric Acid in the year 1992-93, with the technical assistance from Norsk Hydro of Norway and UHDE GMBH of Germany. With a view to step into power generation, coal washeries businessand to augment equity needs of power projects, the chemical division was hived off in March, 2000, as a pert of business restructure & re-engineering.

The success of bottling business made the company not only to expand the bottling activity but also to diversify into new areas of business, i.e., Deep Sea Fishing, Marine Food Processing, Marine Food Exports, Laminated Jute Bags, Manufacture of Ferro Alloys, etc.

The Group has inculcated quality product manufacture as its way of life and worked on the motto to attain leadership in every area of activity of its domain. VBC Ferro Alloys Limited (VBCFAL) was promoted by a group of technocrats & entrepreneurs led by Dr. M V V S Murthi and Shri J S Krishna Murthy. The company was incorporated under the Companies Act, 1956 on 3rd October, 1981.

Initially VBCFAL set up a plant for production of 10,000 TPA of Ferro Silicon at Rudraram Villate, Medak District of Andhra Pradesh at a cost of Rs.5.92 crores. This unit went into commercial production in April, 1985. The Unit has several locational advantages. It is close to 132 KVA power line of AP Transco, adequate water supply is available from Manjeera Reservoir and underground source, the raw material required are available within a radium of 200/250 KM.

In September, 1989, VBCFAL formulated an expansion scheme to increase to capacity of Ferro Silicon from 10,000 TPA to 15,000 TPA and further installed the second furnace in 1992 for production of Ferro Chrome with a production capacity of 22,000 TPA.

Initially, the company was incorporated with an authorized capital of Rs.1.50 crore. Further capital was raised by Public Issue of Rs.80 lakh during 1984. Subsequently, in the year 1990 fully convertible and partly convertible debentures were issued to meet the cost of expansion. The present authorized capital of the company is Rs.20.00 crore and paid up capital is Rs.4.04 crore.

The company had performed well in the initial years and consistently paid dividend from 1985 – 86 up to 1990 – 91 in the range of 20% - 30%. In the year 1991 – 92 because of recession in the steel industry, hike in power tariff, un – remunerative prices and availability of imported Ferro Silicon at prices not comparable to domestic prices, the company incurred cash loss of Rs.4.91 crore and defaulted in payment of institutional dues. Severe power cuts and intermittent shutdown of plant caused damage to the furnace lining, which not only reduced the level of production but also increased the power consumption.

With the deterioration in working of VBCFAL, re – alignment amongst the promoters started taking place which led to stepping down of founder Managing Director – Shri J S Krishna Murthy in December, 1992 in favour of Shri A Sudhakar who also resigned within a short period. Then Shri M S Rama Rao, S/o. Dr. M V V S Murthi took charge as Managing Director and was putting efforts to renovate and restart the company.

In the financial year 1993 – 94, the company posted heavy losses. As at 31.03.1994, the accumulated losses and the intangibles amounted to Rs.20.04 crore against paid up capital reserves of Rs.13.09 crore. The company was registered with Board for Industrial and Financial Reconstruction (BIFR) as a sick company under the provisions of Section 3 (1) (o) of Sick Industrial Companies (Special Provisions) Act, 1985.

During this worst hit period, the company had self introspected and tried to find the reasons for sickness. The major reason the company found was the insufficient & irregular supply of power. To over come this problem, the company has contemplated taking up a Power Project by promoting Konaseema EPS Oakwell Power Limited (KEOPL), a special purpose company incorporated to build, own and operate the natural gas based combined cycle power plant with a capacity of 445 MW to be set up in the State of Andhra Pradesh and

Shri M S Rama Rao stepped down from the position of Managing Director to concentrate on the power project and his brother Shri M S Lakshman Rao took charge as Managing Director with effect from 30th October, 2000.

Furthering the developments, Shri M S Lakshman Rao could successfully bring the company back into financial soundness and also got the company discharged from the purview of BIFR in September, 2001. The company performed well during the years 2002 – 03, 2003 – 04 & 2004 – 05 and paid a dividend of 10%, 10% & 20% respectively.