NEW DELHI, April 19: Maharaja International, subsidiary of the Sweden-based AB Electrolux, expects to breakeven in 1998-99. The company, however, says that it will take three to five years to wipe out its accumulated losses.The company plans to double its turnover to Rs 300 crore during 1998-99 by selling almost 400,000 Kelvinator refrigerators.Maharaja International sold 200,000 refrigerators in 1997-98 and expects the strong pull for its Kelvinator brand to double sales in the months to come. "So far our sales are right on target," according to managing director Ram S Ramasundar.
Meanwhile, Electrolux has abandoned the dual-branding strategy for its refrigerators. The company has decided to sell all refrigerators under the Kelvinator brandname, at least for some time to come. Kelvinator is perceived as value-for-money brand, while Electrolux was considered a premium brand. The Swedish white-goods major is also weighing the option of setting up a green-field frost-free refrigerator facility in Indialike arch rival Whirlpool Corporation. Whirlpool facility saw investments over Rs 320 crore, but Ramasunder expects Electrolux's frost-free refrigerator facility to be set up with just about Rs 160 crore.
The facility will cater primarily to local demands. A portion of the production may be despatched to certain Asian markets, Ramasundar said. A decision on such a facility is likely to be made by mid-1999.
Electrolux may use Maharaja International's Shahjahanpur facility to build the frost-free machines next year, Ramasundar added. It is also looking at sourcing frost-free machines with cooling capacity of less than 300 litres from Voltas.
Electrolux has been sourcing direct-cool refrigerators, of certain specifications, from Voltas since the last year to meet the shortfall in supply from Maharaja International's Shahjahanpur facility. This facility has an installed capacity to manufacture 250,000 refrigerators and since it was being upgraded the entire capacity was not available. During 1997-98, Voltashad supplied about 40,000 direct-cool refrigerators. This year, Electrolux proposes to source up to 80,000 refrigerators from the Tata-group company.
At the same time, Maharaja International expects to complete its expansion programme by September. This will raise the capacity of the facility to 400,000 units per annum.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.