Voltas Ltd, the Tata Group's engineering and air-conditioning solutions firm, is planning to re-enter the Indian refrigerator market by the beginning of 2006 with the brand Indicool.
The company had sold the Voltas brand and its refrigerator business to Electrolux in 2000 under an agreement that it would not sell refrigerators directly in the market for 6 years.
Voltas has a production capacity of 500,000 refrigerators and is a supplier to Samsung and Haier. "Even today, we are the country's most cost-efficient refrigerator manufacturer and we want to take full advantage of that,” said KJ Jawa, Voltas vice president if Operations.
Voltas is preparing for the re-launch by test-marketing its 55-L refrigerators branded Coldcell in 11 cities. Coldcell is Voltas's brand for refrigerated glass door coolers whose main buyers are food and beverages firms like Coca-Cola, PepsiCo, Nestle, and Cadbury.
The 3.7-million Indian refrigerator market is dominated by multinationals like LG, Whirlpool, and Samsung, but Voltas believes that it can again become a major player given its strong manufacturing and marketing capabilities.
“To come back into the refrigerator market, we will not have to make any significant additional investment and our depreciation and interest costs will be almost nil,” Mr. Jawa said.
According to Mr. Jawa, the firm is in a much better position today than 3 years ago to operate in diverse product categories.
“Five years ago, we decided to be a pure engineering services firm. Now, with our success in air-conditioners, we are fast changing into a marketing-driven company from an engineering company,” he said.
Voltas is planning to leverage its network of 1,700 retail outlets across the country and an established service network for its air-conditioners to drive refrigerator sales.
In the country’s 1-million air-conditioner, market, Voltas is considered the largest player after LG, with a 17-percent share.
“In the last three years, we have consolidated our position in air-conditioners. During the first half of this financial year alone, our sales have gone up by around 50 per cent,” Mr. Jawa said. (Business Standard)
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