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The company has embarked on a major exercise to "rejuvenate" the Voltas brand. It would use service as a key differentiator of this brand building exercise.

CHENNAI, Sept. 28

VOLTAS Ltd, which now manufactures refrigerators for LG on a contract basis, will shortly begin producing refrigerators for Samsung, according to Mr A. Soni, Managing Director, Voltas.

He told Business Line here today that Voltas had a capacity to manufacture four lakh refrigerators a year. Last year, it made about 2.5 lakh refrigerators in the 165-litre and 210-litre categories for LG. The order for contract manufacture from Samsung was expected shortly and Voltas hoped to make between one lakh and two lakh refrigerators for Samsung.

Mr Soni, who was in Chennai to flag off a series of marketing initiatives for Voltas air-conditioners, said that besides the refrigerators, the company also manufactured coolers for companies such as Pepsi and Amul. It would use the retail channel that was being used for the air-conditioners to push its refrigerator sales. He said that Voltas would launch a new range of room and split air-conditioners for the next season. The launch was slated for February-March next year. Without giving details about the new launches, he said that the products would have improved energy efficiency. The Union Government was expected to come out with energy efficiency ratio and star rating for the air-conditioners some time next year and Voltas' products would be conforming to these. Besides, Voltas would also launch 0.8 tonne air-conditioners, targeted at the coastal areas and also the smaller homes.

Mr Soni said Voltas had embarked on a major exercise to "rejuvenate" the Voltas brand. The company would use service as a key differentiator of this brand building exercise. Market studies conducted by the company revealed that the brand had become "old and fatigued". The brand image would be revived through product excellence and service standards. About Rs 60 crore is to be spent on brand building and marketing, beginning last April, over a period of time. So far, it had spent about Rs 12 crore.

Thanks to its joint venture with Fedders of the US, Voltas was in a position to get product upgrades on a regular basis. The joint venture also enabled it to get the latest technology.

Voltas would also like to increase its exports, which were mainly to the Middle East now. It was prepared to export under the Voltas name or any local brand, which the dealers in the Middle East preferred, he said.

The company was aggressively targeting the new private telecommunication companies, which would require air-conditioning for the exchanges and other facilities. This market was estimated to be about Rs 200 crore and Voltas had come out with a 2x2-tonne air-conditioner for the telecom market.

Mr Soni said that air-conditioner market grew by 25 per cent in the first quarter of this financial year, to 265,000 units. Voltas grew by 11 per cent during this period, to 60,000 units.

As part of its service initiatives, Voltas would increase the number of authorised service agents from 600 now to 900 by next March.

In Chennai, the company today launched a mobile service facility, which number would go up to 20 over the next few months. It also inaugurated a Voltas Dome, an exclusive products showroom, in the city.

The company would come out with another voluntary retirement scheme aimed at reducing the number of staff by another 350-400. This would cost about Rs 15 crore and result in an annual saving of Rs 8 crore. The company had implemented a VRS for 2,500 staff at a cost of Rs 125 crore and which resulted in an annual saving of Rs 50 crore. Thanks to its restructuring, he said, the debt had been reduced by Rs 260 crore, to about Rs 70-80 crore while the interest burden had come down from Rs 48.5 crore in 1998 to Rs 5.5 crore at the end of March 2002.

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