Electrical appliances major Havells India Ltd intends to more than double its revenue from overseas markets.
“At present, a fourth of our income comes from our overseas operations, and we want to double it in the next two years,” said Anil Gupta, Joint Managing Director of this debt-free listed entity.
According to him, though the European and Latin American markets are yet to bounce back, with a 10 per cent growth over the previous year, Havells’ sales figures from these markets are “really encouraging”.
Sylvania acquisition
Five years ago, it acquired UK-headquartered lighting products manufacturing company Sylvania with six manufacturing facilities in Europe, Latin America and Africa, in a Rs 1,500-crore deal.
Sylvania was a loss-making unit then. Havells turned this around into a profitable division last year. Last year (2011-12), this brand alone accounted for 40 per cent of Havells’ overall turnover of Rs 6,500 crore.
Besides Sylvania, the company’s products across brands such as Havells, Crabtree and Standard are also available in global markets.
Having invested Rs 1,000 crore in capacity expansion across its manufacturing facilities in India, the company now wants to focus on consolidating its global operations. It recently completed its Rs 100-crore greenfield facility to manufacture lighting fixtures at Neemrana in Rajasthan. This is likely to go on stream in the next two months, said Gupta.
However, to have a “reasonable play” in the Chinese market, the company formed an equal joint venture with a local partner Yaming Lighting Co to manufacture lights. Havells has invested $20 million so far. “Now, we are on the look out for acquisition of a marketing company there to brand and market our products in China ,” he said.
Expected growth
For the current financial year, with these expanded and new facilities kicking in, the company expects to post at least 20-25 per cent growth. To facilitate that, Havells has widened its product portfolio in the appliances segment with a new range of coffee makers, electric kettles, pop-up toasters and sandwich makers.
“We expect to take our income from this segment to Rs 500 crore in the next three years from the current Rs 200 crore,” Gupta says.
The scrip on the BSE today closed at Rs 647.30, down 0.65 per cent.