Financial Daily from THE HINDU group of publications
Wednesday, Jun 23, 2004
Air-conditioners & Refrigerators
Corporate - Announcements
Electrolux to invest in R&D centre To source IT services, components from India
New Delhi , June 22
CONFIDENT that its Indian arm, Electrolux Kelvinator Ltd (EKL), will be able to break even by the end of next year, Swedish major AB Electrolux has chalked out strategies for greater integration of its activities in India with its global operations.
Sharing its plans for India, Mr Hans Straberg, President & CEO, AB Electrolux, said: "We are committed to the Indian market and will provide full strategic support to the Indian subsidiary. The company will continue with its planned strategy and will further strengthen its position by brand-building and new product development programmes."
The parent company has pumped in close to $100 million in the Indian subsidiary since 2002. It plans to invest Rs 40 crore by 2007 in a research and development (R&D) centre here, besides sourcing IT services from Patni Computers as well as components from India.
Mr Straberg, who is going to inaugurate the company's R&D centre in Shahjahanpur, Rajasthan, said: "This centre will act as a technology centre for the SAARC region. It will act as a regional hub to develop new technologies and product lines."
AB Electrolux is also looking at India as an attractive outsourcing centre for the entire Electrolux Group. The Group has set a target of sourcing components worth $300 million from India in the next three years. Currently, AB Electrolux sources materials and parts worth $9 billion every year, he said.
Over the next few years, a part of the North American call-centre activities will be shifted to India, Mr Straberg said. The North American call centre for Electrolux home products is expected to handle over 700,000 calls in 2004, and based on the future growth in market share and implementation of toll-free calls, the volume is estimated to grow manifold to over two million calls by 2006.
"To handle this growing business, the Group plans to supplement its existing internal contact centre in Augusta, Georgia, with outsourced seats, most of them to be located in India. In the first phase, a 20-seat test centre is being located in New Delhi, run by Hero Group and Portland-based Livebridge," he said.
This test centre will commence operations in the third quarter of 2004. The company has entered into a contract with Patni Computers to source IT services. "The relationship currently focuses on application support and development," Mr Straberg said.
Emphasising that India is assuming a greater role in the overall Group strategy, he said, India is to become the SAARC headquarter for the Group. "The business operations of SAARC, excluding Sri Lanka, would be handled from India," he said.
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