Financial Daily from THE HINDU group of publications
Saturday, May 29, 2004
Voltas' cooling unit may contribute more
New Delhi , May 28
AFTER re-introducing its products in the domestic consumer durables market, Voltas Ltd's Cooling Appliances Division (CAD) is expected to contribute 35 per cent to the company's total turnover during the current fiscal. The CAD closed the last fiscal with a turnover of Rs 500 crore.
Armed with an aggressive marketing strategy, coupled with new products in its basket, the company plans to regain lost ground. The products in the offing from the Voltas stable include sub-one tonne split air-conditioners at less than Rs 15,000, Mr K.J. Jawa, Vice-President (Operations), Voltas Ltd, said. Following the success of the sub-one tonne window ACs early this year, the company has now decided to foray into split ACs.
"We were looking at selling 25,000 units of the sub-one tonne window ACs during the current year. But the company has already sold 13,450 units of the product till now," he said.
Speaking about the target consumer category, Mr Jawa said, "The company is targeting the home segment, especially first-time AC buyers, with the launch of its sub-one tonne ACs. Basically these are going to be mass-market products."
The company is also looking at the frost-free refrigerators category. To begin with, it plans to outsource the manufacturing of frost-free refrigerators, Mr Jawa said. "We are scouting for joint venture partners," he said.
Voltas is focusing on the semi-urban and rural markets with its recently launched range of refrigerators in the direct cool category under the Coldcel brand. "To start with, we are not eyeing volumes," he said.
Outlining the company's strategy, Mr Jawa said it was "to offer American technology with Chinese pricing with an understanding of consumer psychology." With the refrigerators range, the company is looking at small families and the children's room. In fact, thanks to its small capacity, the Teenie Weenie range has been in demand in hotels, guesthouses and hostels as well.
The growing demand for its products has prompted the company to review its decision to be the original equipment manufacturer (OEM) vendor for other industry players. It has decided not to supply more than 300,000 units from its total capacity of 500,000 units to others. After-sales service remains a focus area for the company, Mr Jawa said, adding that the company, to push its product sales, will capitalise on the retail network.
Voltas has also firmed up its export plans. "We have already entered into strategic tie-ups in West Asia, Bangladesh, South Africa, Sri Lanka and Nepal. Till now we have sold 9,000 units of ACs. In the next three years, the cooling appliances division is looking at 20 per cent turnover from exports," he said. From June 13, the company will join hands with a leading business house in Dubai for distribution of its range of cooling appliances.
On advertising budget, Mr Jawa said the company has set aside Rs 17 crore for media spend, of which Rs 5 crore will be spent on the refrigerators category and various promotions.
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