The other new products which DAEL plans to introduce under refrigerators is a new 430 litres deluxe refrigerator with stainless steel finish. The company also plans to launch direct cool refrigerators in the 185 to 200 litres category to ensure direct cool's presence in all categories.

"As part of its marketing strategy, DEL plans to invest into direct cool refrigerators since bulk of the refrigerator sales is from direct cools - at 85 per cent. After establishing Daewoo in the frost-free segment, the move to the direct cools segment is aimed at gaining higher volumes and better penetration," says DAEL director-marketing and sales Mr S H Hyeon.

However, DAEL's focus is likely to remain on frost-free due to low margins in the direct cool business, claims Mr Suh. Explains general manager-sales and marketing Mr C S Gaurinadh: "The total Indian market size of the frost- free refrigerators is Rs 32 crore in the current year, and that for direct cool is Rs 27 crore. The company expects the market for frost-free to grow to 35 crore and Rs 39 crore for the years ending 2001 and 2002. Similarly, the direct cool market is expected to grow to Rs 29 crore and Rs 32 crore, respectively."

Says Mr Suh: "The frost-free market constitutes 16 per cent of the total refrigerator market, wherein Daewoo's market share is 12 per cent. The total refrigerator market is expected to grow at the rate of 10 per cent in the next three years."

Apart from this, DAEL is increasing production capacity of the frost-free refrigerators by 150 per cent in the next two years to meet the needs of the local and global markets.

DAEL is investing Rs 25 crore to expand the production capacities of both frost-free as well as direct cool refrigerators in two phases. Under Phase I -2001, the capacity is being expanded from the existing 1 lakh units to 2.5 lakh units per annum, whereas, under Phase II-2003, it is being increased from 2.5 lakh units to 4 lakh units per annum.

Says Mr Suh: "The company is enhancing the capacity in the wake of the growing domestic demand in direct cools as well as OEM demand from Indian as well as global players. DAEL has exported 2,000 units of refrigerators to the Middle East, Africa and SAARC countries since April 2000. DEL has generated revenues close to Rs 2 crore in value terms.

Besides, DEL plans to introduce Daewoo's air conditioners in the next two years with an investment of Rs 15 crore. The air conditioner market is growing at a rate of 87 per cent in the Indian market. DAEL also plans to introduce Daewoo branded flat colour televisions-14 and 21 inches-in April 2001. Says Mr Gaurinadh: "The other new products like direct cool refrigerators, semi-automatic washing machines and new models of CTVs would be distributed through the existing channels, as there exists a synergy in the channel. The launch of these new models addressing the mass market will also allow into expanding our distribution reach."

DAEL is already marketing 5 lakh Daewoo colour televisions per annum - priced between Rs 9,500 to Rs 15,500 in the Indian market. The volumes of washing machines is 1 lakh pieces per annum and colour televisions 50,000 pieces per annum. DAEL has achieved a turnover of Rs 160 crore for the year ending 2000, which is expected to grow to Rs 250 crore by the year-end 2002. DEL is poised to make an operating profit of $100 million (Rs 470 crore) in 2000. DAEL plans to expand the number of dealers from 1,500 to 2,200 by 2002 end. DEL plans to kick off an ad campaign for its products in a few months with an adspend of Rs 13 crore.