Whirlpool looks at acquisitions to compete with Korean players

With increasing competition from Korean chaebols, American multinational Whirlpool is seeking inorganic growth opportunities to help increase its revenues, market share and product portfolio in India in the next two years.

Having set up operations in the country 22 years ago, the home-appliance player has a lot of catching up to do with its Korean and Japanese competitors who have already taken a lead in the consumer durables segment with a dominant position across the sector.

“We have a global team in place to scout and evaluate inorganic opportunities. Except acquiring Kelvinator and TVS (acquired major shares in TVS joint venture) when we entered in 1995, we have not taken over any brands in India,” said Kapil Agarwal, Vice-President, Marketing, Whirlpool India. “But now, as we enter new categories such as air conditioners, dishwashers and hobs, we are seeking acquisitions through which we can add value to our business.

“Acquisitions will also help Whirpool compete with the rest of the MNCs. It is a competitive market, and today, more than the Japanese players, it is the Koreans who are our main competitors. We do not have any budget for making acquisitions as long as we can add value to our business in India.”

Assigning a capex of ₹500 crore for the next three years, Whirlpool claims that 95 per cent of what it sells is made in India at its manufacturing bases in Faridabad, Puducherry and Pune. Today, almost 80 per cent of the firm’s turnover comes from refrigerators and washing machines.

However, with customs duties increased for some of the home appliance categories, the company might have to take a call on whether it would continue to import its premium brand of Kitchen Aid which includes kettles and blenders.

“Kitchen Aid is a 100 per cent imported brand in the super-premium category. While we manufacture most of our portfolio in the country, we have to find a way to deal with the import duties with regard to Kitchen Aid,” Agarwal said.

Despite doubling of customs duties for categories such as microwaves, Whirlpool will continue to import the products from China due to lack of scale and slow growth in the category.

Expecting its top-line to grow 10-15 per cent, the firm is also evaluating the need to have stand-alone stores apart from its existing presence across 25,000 multi-brand outlets.