Financial Daily from THE HINDU group of publications
Thursday, Aug 25, 2005
Whirlpool of India hopes to cut losses this fiscal
Vipin V. Nair
Kochi , Aug. 24
HOME appliances maker, Whirlpool of India, hopes to cut its losses "significantly" in the current financial year by boosting sales volumes and improving operating efficiencies.
"We are expecting better results for paring our losses significantly," said Mr Arvind Uppal, Managing Director of Whirlpool of India. For the year ended March 2005, the company, a subsidiary of US-based Whirlpool Corporation, posted a loss of Rs 100 crore on net sales of Rs 993 crore. Whirlpool of India shares are now quoting at Rs 28 on the BSE.
Mr Uppal said Whirlpool of India is currently focussing on three areas to pare losses: topline growth, cost structure and production and fixed overheads.
"Our topline should grow by over 30 per cent to Rs 1,400-1,500 crore," he said. Refrigerator sales are likely to go up by 20 per cent to one million units during the year, while 2.5 lakh to three lakh washing machines would be sold.
The company has a 25 per cent share in the refrigerators market and a 15 per cent share in the washing machines segment, Mr Uppal said. Whirlpool of India is striving to bring down the cost per piece of its products by improving production efficiency and streamlining operations. It has manufacturing facilities in Faridabad, Pondicherry and Pune.
"We are not producing as much as we would like to... . We have to produce more pieces per person," Mr Uppal said, adding that efforts are now on to reduce manufacturing costs without compromising on quality.
Mr Uppal blamed the lack of transparent pricing and cutthroat competition in the home appliances market for Whirlpool of India's current problems. He claimed that the company could not compete with rivals who triggered a price war, as it did not compromise on quality by using cheaper components.
"Consumers are not able to determine the issue of price and quality. They are in a Catch-22 situation and go for lower prices," he said, adding that Whirlpool of India would not "play the price game."
Asked whether Whirlpool would go in for a voluntary retirement scheme (VRS) at its plants, Mr Uppal said there is no such plan right now. "We can't afford a VRS now," he said. The company has around 2,800 employees.
Mr Uppal said there are no immediate plans to manufacture microwave ovens and air-conditioners locally, as present volumes are low. Microwaves and air-conditioners are now being imported from China, and account for only 10 per cent of the total sales.Mr Uppal said Whirlpool of India has set a target to become the number one refrigerator brand in the country in the next 2-3 years, from its present position of number two in the market.
Stories in this Section
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | The Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |
Copyright © 2005, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line