Financial Daily from THE HINDU group of publications
Friday, May 21, 2004
Electrolux Kelvinator may not declare itself sick Hopes for a turnaround soon
Mr Rajeev Karwal, Managing Director and CEO, Electrolux Kelvinator Ltd, at the launch of `Bijlee', the world's first refrigerator that works without electricity for up to 12 hours, in the Capital on Thursday. - Kamal Narang
New Delhi , May 20
ELECTROLUX Kelvinator Ltd (EKL), the Indian arm of the Swedish white goods major, AB Electrolux, is not likely to take shelter under the Sick Industrial Companies (Special Provisions) Act (SICA), 1985.
According to Mr Rajeev Karwal, Managing Director and CEO, EKL, "The company has been able to make its net worth positive mainly due the Rs 200-crore (approximately) raised through the rights issue."
EKL's board in October 2003 had noted that the accumulated losses of the company, as on September 30, 2003, have exceeded its net worth. The company would be making necessary filings and reporting with the relevant regulatory authorities. When asked when the company expects turnaround in its financial performance, Mr Karwal said, "We are hopeful of wiping out our losses by the last quarter of 2005."
The company has achieved a 42 per cent sales growth in volume terms and 49 per cent growth in value terms in the first quarter of the current year. The company's sales in value terms increased to Rs 97.56 crore from Rs 65.45 crore for the corresponding period last year. After going through a period of restructuring and rightsizing in 2003, the company will focus on repositioning of its brand during the current year, with the target consumers being women.
Electrolux Kelvinator is looking to make inroads into the semi-urban and rural market this year with its two new launches - `Bijlee' and `Tamanna' - in the direct cool refrigerators segment. Priced at Rs 10,990 (excluding battery cost) the 170-litre Bijlee refrigerators can work up to 12 hours with power backup without electricity.
To begin with the product will be available in the north and east India. "In next three months we propose to unveil the product in the west, followed by the South," he said.
The company is targeting the untapped customer base of 13.1 million with a monthly household income in the range of Rs 3,000-Rs 8,000.
EKL has also applied for technology patent for this product. To facilitate the purchase of Bijlee range, EKL is in talks with various consumer finance companies.
"We are holding discussions with Nabard to encourage sales in rural areas," Mr Karwal said.
Tamanna's 230-litre refrigerator, priced at Rs 13,990 (in north India), comes with an auto search FM radio with a message recorder that can record voice messages of 10-second durations.
The product is being launched first in the West and the South.
"This way we will be available in all the four markets," he said. With the launch of Tamanna, EKL now offers almost 60 refrigerators in its Oxy range of products.
EKL has also worked out a slew of launches for its washing machines segment and plans to increase the range to 15 from existing five.
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