Electrolux to Pump Money into Indian R&D Center
Jun 23, 2004
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The Electrolux Group has announced that it will set up a research and development (R&D) in Shahjahanpur, Rajasthan, and invest Rs400 million (approx. U.S. $8.7 million) by 2007 in a bid to integrate Electrolux India's activities into its global operations.

Hans Straberg, president & CEO of Sweden-based AB Electrolux, would inaugurate Electrolux India's state-of-the art R&D center in Shahjahanpur and Electrolux Home in Gurgaon.

The new R&D center would act as a technology center for the SAARC region, Electrolux said, adding that it would be the regional hub to develop new technologies and product lines.

A team of nearly 40 senior technologists and scientists would be working at the facility, which would enhance the already-existing innovative and technological capabilities of Electrolux's Indian operations.

AB Electrolux is also looking at India as an attractive outsourcing center for the entire group. The group has set a target of sourcing components worth U.S. $300 million from India in the next 3 years.

This is in line with the company's identification of India as a sourcing base for components for its outdoor division that makes garden and forestry equipment, according to Electrolux.

Currently, AB Electrolux sources materials and parts worth U.S. $9 billion every year and plans to make India a major sourcing base for the group.

Mr. Straberg on his first visit to India as CEO of the world's largest producer of appliances with an annual turnover of U.S. $17 billion stressed the increasing importance of India in the group's global plans.

"We are fully committed to the Indian market and will provide full strategic support to the Indian subsidiary," Mr. Straberg said. "Our interests in India are long term and in line with our global operations. The company will continue with its planned strategy and will further strengthen its position by brand building, new product development program and will emerge as the 'most innovative appliances' brand in the country that understands its customers."

Commenting on the R&D center, Mr. Straberg said, "The year ahead will witness enhanced integration of the Indian operations with the global operations of AB Electrolux. The initial focus of R&D facility will be to develop innovative products based on consumer insight.

During the next few years, a part of the North American call center activities would be shifted to India, Electrolux said. The North American call center for Electrolux home products is expected to handle more than 700,000 calls in 2004, it added.

Based on the future growth in market share and implementation of toll-free calls, the volume is estimated to grow manifold to more than 2 million calls by 2006, Electrolux said.

To handle this growing business, the Electrolux group plans to supplement its existing internal contact center in Augusta (Georgia, U.S.) with outsourced seats, most of them to be located in India.

In the first phase, a 20-seat test center is being located in New Delhi, India, run by the Hero Group and Portland, OR, U.S..-based Livebridge, Electrolux said.

If the test center, which would commence operations in the third quarter of 2004, proves successful, its seat capacity would be expanded to handle increasing U.S. call volumes in 2005, the Swedish white goods giant said.

Electrolux's co-operation with Livebridge would not impact the current number of employees at Electrolux's North American operations, it added.

The company has entered into a contract with Patni Computers to source IT services, Electrolux said. The relationship currently focuses on application support and development, it added.

In the mid to longer term, Electrolux would turn to Patni for additional technology consulting skills to drive further improvements through the scoping, testing and benchmarking of emerging technologies.

Mr. Straberg also indicated that there are plans to add two more product categories -- floor care and built-in-appliances to the whole product portfolio by the year-end. (IndiaInfoOnline.com)

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