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Voltas Beko launches first manufacturing unit in India

The first set of products to be rolled out will be refrigerators.

January 30, 2020 / 07:19 PM IST
 
 
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Voltas with its joint venture partner Turkey's Arçelik launched their first 'Make in India' factory with $180 million (Rs 1,286 crore approximately) investment in Sanand, Gujarat. This factory will be used to manufacture consumer durables for the JV company Voltbek Home Appliances.

The first set of products to be rolled out will be refrigerators. Voltbek will be producing 1 million refrigerators from thew new facility in the first year itself.

Voltbek has targeted production of 2.5 million units of consumer durables (refrigerators and other appliances) from the Sanand facility over the next five years.

Both Voltas and Arçelik hold 49 percent in the joint venture while their parent companies (Tata Group and Koç Holding) hold 1 percent each. The investment will also be split 50-50 percent.

Noel Tata, chairman, Voltas said that the company is delivering on the 'Make in India' promise.

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"There is massive potential in the consumption-driven Indian economy. We forsee a greater pace of change going forward. This will be driven by a strong consumption growth with rapid electrification leading to improvement in power quality and availability across the country. Proliferation of consumer finance companies has supported the growth of the consumer durables (CD) firms. This will enable the CD sector to grow at 10 percent over the next five years and double the size of the market from Rs 70,000 crore currently to more than Rs 1.40 lakh crore."

Tata added that their supply chain has already begun to relocate itself around this factory.

This, he said, will lead to development of Gujarat as a consumer durables manufacturing hub just as the Tata Motors factory led to Gujarat's development as an auto manufacturing hub.

The factory has around 500 employees currently.

Levent Çakıroğlu, CEO, Koç Holding, said that in 2010 he and his team came to India with our team to explore the potential. This team then met Voltas and worked on a potential collaboration. An agreement on setting up Voltbek Home Appliances was finally inked in 2017 between Voltas and Arçelik. Voltas Beko as a brand was launched in September 2018.

Voltbek Home Appliances already sells goods in India. However, these products were imported from abroad so far. Refrigerators, washing machines, dishwashers and microwave ovens constitute Voltbek's product portfolio. The company's sales is likely to touch 0.5 million units by FY20 end.

The production facility will initially begin with refrigerator manufacturing. In the second phase, washing machines will be added. In the third stage, others like dishwashers and microwave ovens will be added to the list of products manufactured at Sanand.

Arçelik's parent Roç Group's combined revenue constitutes 8 percent of Turkey's GDP and export contribute 10 percent of Turkey's total exports.

In an interaction with Moneycontrol, Pradeep Bakshi, MD & CEO, Voltas said that the company is looking to have a 10 percent market share in each product category (refrigerator, washing machine, dishwasher and microwave oven) by 2025.

"Nobody remembers the number two player in any field. We have been market leaders in air-conditioners and want to extend it to other categories as well," he added.

So far Rs 700 crore has already been invested in the facility. Bakshi explained that depending on the demand, they will invest further.

The global consumer durables market is estimated to be USD213 billion. Of this, APAC contributes 41 percent.
M Saraswathy
first published: Jan 30, 2020 07:19 pm

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