PUNE, June 3: Merloni TermoSanitari (India), manufacturers of water heaters, plans to introduce water heaters in the next three months to address the entire product and price range, from the instant to 100 litre capacity. MTSIL, in which Merloni TermoSanitari SpA holds a 74 per cent stake, will introduce other products from the Italian parent's range once it moves to its own premises at Chakan, by December.MTSIL currently has water heaters in three price and product ranges, namely, Racold, Racold Eterno and Ariston. This will be widened, with Racold retaining the 15-20 litre capacity water heaters while larger sizes will be introduced in the Ariston range.
New products that could be introduced are solar and gas water heaters, bathroom and other appliances. However, a final decision about the new products will be taken after they move to Chakan, AK Rathi, managing director, MTSIL, said.
MTSIL, formed in 1996 through the acquisition of a controlling stake in the erstwhile Racold Electrical Appliances bythe Italian MTS group, has a paid-up capital of Rs 7.62 crore, which AK Rathi said could be increased if the market demand for the product necessitated. He pointed to the parent company's commitment, with a promised investment of Rs 30 crore over the next five years, if the market should grow.
He vehemently denied any plan to phase out the Racold brand, adding that with the recent introduction of the Racold Eterno model, MTSIL has demonstrated its intention of retaining the Racold brand name. The larger, 25 litre capacity water heater, carries the Italian brand name of Ariston and is targeted at the top-of-the-line segment. Price-wise, taking the base price as that of the Racold water heater, the Racold Eterno is 15 per cent higher while the Ariston is 40 per cent higher priced.
Racold has a 25 per cent market share in the organised sector, estimated at 300,000 water heaters with the unorganised sector also estimated at 300,000. Attributing a value for the market is difficult since it is a price-sensitivemarket, with a large unorganised segment, Rathi said.
MTSIL had a turnover of Rs 20 crore in 1997 which Rathi said would grow at an annual rate of between 30 per cent to 40 per cent only through water heaters. Its new plant at Chakan, being set up at an investment of Rs 11 crore, will have the capacity to manufacture up to 200,000 water heaters annually with the prospect of new production lines being laid for other products.
The Indian operations will be the sourcing point for MTS products in the South Asian region though they would not enter the South East Asian markets since MTS plans to set up a joint venture in Vietnam. It already has a manufacturing presence in China, its first outside Europe, followed by the Indian subsidiary, the group's 14th plant.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
