U.S.-based Whirlpool is planning on investing in its Indian operations in an effort to wipe out the division's losses.
The company plans to invest U.S. $9 million to $10 million into building its brand presence over the next year, which will be in addition to the $5 million to $10 million it invests annually in India operations.
"Our biggest challenge is to offset the rise in material costs of steel, plastic, and oil. This global phenomenon -- sweeping all markets including North America and Europe, has impacted the industry significantly," said Whirlpool Corporation Chairman & CEO Jeff M Fettig, during a visit to India . "We have a robust operating footprint and good distribution. Our target is to register a growth that’s 1.5 to 2 times higher than the industry," he said.
Garrick D’Silva, regional vice-president, Whirlpool Asia, said the firm would return to profitability within a very short time frame. "It could be three or six months," Mr. D’Silva said.
Whirlpool had recorded net losses of Rs 33.65 crore in 2003-2004, against a net profit of Rs 8.64 crore the previous fiscal. As for market share, the firm has conceded its leadership position to Korean manufacturers LG Electronics and Samsung in refrigerators and washing machines.
Whirlpool intends to continue with its strategy of pricing products 2 percent to 5 percent higher than competition.
"When material costs are consistently rising, companies have two choices -- either raise prices or loose money. We have raised priced by 2.5 percent to 4 percent. We intend to continue this strategy," Mr. Fettig said. He added that the firm’s target market included 60 million households. (The Times of India)
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