Bata India Ltd, the country's largest shoe maker, is repositioning itself as a marketing firm, according to managing director S J Davies.

This follows the company's decision to transfer two manufacturing units -- one each at Faridabad and Mokamehghat -- into separate firms last year.

While disclosing the management's perception of the market outlook in the company's annual report for 2002, Davies said brand managers were working on the exercise that would be a "departure from the past and that visualises to combat competition."

The annual report will be placed before the shareholders for their approval on June 27. The managing director, however, did not dwell on whether production will keep continuing at all the factories in the changed scenario.

He said the company had identifies strategic areas where cash drain was taking place and depleting the financial resources.

"A company of this stature has many unrelated costs which are indispensible. Also the company is fully committed to its social liabilities and social coats which add to the cost of production," Davies stated.

Bata has production units at Batanagar, West Bengal; Bataganj, Bihar; Faridabad, Haryana; Bangalore, Karnataka; Batashatak, Tamil Nadu; and Mokameghat, Bihar.

Industry watches aver that production at some of the units would be reduced. They cited the instance of the Batanagar factory which witnessed a drastic cut in production.

Production may be licensed out under operating arrangements as well, a source said. The shoe major has been sending signals of converting itself as more of a marketing company by keeping the production level well below full capacity over the past few years.

Bata India has produced 24,922 pairs of rubber and canvas footwear against a licensed capacity of 42,500 units. Leather footwear products stood at 11,796 as against the licensed capacity of 15,637 pairs. Finished leather from hides stood at 761 pieces while the licensed capacity was 1,147 pieces.

The company had decided to transfer Faridabad and Mokamehghat units. The demerger decision is awaiting the Calcutta high court's approval.

The company has sunk deeper into the red last year. Its net loss stood at Rs 7.41 crore (Rs 74.1 million) in 2002 compared with the previous year's net profit of Rs 3.97 crore (Rs 39.7 million). Its sales, during the period, came down to Rs 704 crore (Rs 7.04 billion) from Rs 776 crore (Rs 7.76 billion).