Electrolux Kelvinator Ltd., the Indian unit of Swedish Electrolux AB, announced it will launch new products in existing and new sectors aimed at turning around losses by 2005 and expanding market share.
"We are on the right track and our restructuring efforts made in 2003 have started showing results," said Rajeev Karwal, managing director and CEO of Electrolux Kelvinator.
Electrolux Kelvinator posted a net loss of INR 1.14 billion (approx. U.S. $25.2 million) in the July-September 2003 period compared with a net profit of INR 93.6 million (approx. $2 million) in the same period in the previous year. In 2002, the company made a net loss of INR 1.7 billion (approx. $37.5 million), widening its net loss of INR 1.4 billion (approx. $30.9 million) in the previous year.
Electrolux entered India in 1982 in a joint venture with home appliance company Eureka Forbes Ltd. The company gradually increased its presence by acquiring stakes and forming more joint ventures including one with Kelvinator Ltd.
Mr. Karwal said Electrolux has phased out some brands, closed uneconomical units, and cut staff last year in line with a restructuring program directed by its advisers McKinsey India. He added that the company plans to leverage on product innovation on the lines of its recently launched a talking washing machine and a hands-free refrigerator, products unique to the Indian market.
Electrolux will launch air conditionersâ€”an entry into a new segment after its recent entry into the microwave oven segment, Mr. Karwal added.
Electrolux Kelvinator has a 15 percent market share in fridges and a 2.5 percent share in washing machines, according to ORG Marg Marketing Research data.
Mr. Karwal said the company will continue to lower its costs in the current year by managing its working capital efficiently. He added that recovering demand in the consumer durable segment will also help the company's sales to rise this year.
"We expect the overall market for consumer durables to grow in double digits, for example, after three years of stagnation, the washing machine sector is showing positive signs of a pick up in demand," said Mr. Karwal. (Dow Jones)
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