STOCKHOLM: Electrolux Kelvinator Ltd (EKL), the Indian arm of the Swedish white goods major, AB Electrolux is likely to turn around by 2005 as a fallout of a restructuring exercise initiated by the company with a total revamp of the management team last year.
Speaking to media persons in Stockholm, Hans Straberg, president and CEO of AB Electrolux said, “The turnaround of Indian operations is on the priority list and we can no more afford to make losses that we have been making in the past.” He added that ownership issues “” some stakes are held by Mr Harish Kumar “” are going to be resolved soon and then the company would like to delist from Indian bourses.
“We have full faith in the new management team in India and we plan to integrate the Indian operations on the global parameters of human resources management and marketing,” Mr Straberg said.
Mr Straberg was very bullish on the potential of the Indian and Chinese operations. He said, “During the next phase of growth, both these countries are going to be very important for us. The home appliances division in India is growing at the rate of 6 %.”
While accepting that the Korean companies in India have been very aggressive in grabbing market share, he said, “Our strategy to increase market share does not include aggressive pricing. We would first increase our presence in various product categories, restructure our cost base and make the local manufacturing in line with global practices”.
The company plans to launch air conditioners and microwaves in the current year under the Electrolux brand name unlike refrigerators which have been branded as “˜Electrolux Kelvinator’. The company has ozone frost-free refrigerators based on combination of “cutting edge technology and consumer insights”.
“We plan to launch our high-end products under the Electrolux brand. They will initially be imported from China and Brazil. The company will manufacture them indigenously only after reaching a certain critical mass,” Mr Straberg said.
The company’s strategy is to emerge as the most preferred consumer durable company in India in the next few years, he said. By 2007, it aims to corner 25% and 17% market shares in its mainstay businesses of refrigerators and washing machines. At present, refrigerators account for nearly 95% of the company’s sales.
On a question about the Indian arm becoming the outsourcing hub for Electrolux worldwide, he said, “China has some advantage over India as far as manufacturing is concerned, but as far as the component sourcing and software needs are concerned, we are definitely looking at India.”
>From The Economic Times