As a part of the agreement, Metro Therm will provide Usha Shriram with the design specifications and in turn will be paid a 3 per cent royalty of the net sales value for every unit sold for a period of five years, Usha Shriram India executive director Anupam Bharat, said.

"The company has invested Rs 3 crore to import machineries and upgrade the manufacturing facility at faridabad and the products have already started rolling out," he said, adding that the investment has been from internal accruals.

He said the vitreous enamelled tanks and catridge heating element would give the new range of water heaters a longer-life compared to the conventional one.

The company, which claims to have 12 per cent market share, will first launch the new range in west bengal and tamil nadu before going national.

"As West Bengal and Tamil Nadu are very hard water areas, therefore we will test market our products in these two states (in August and September) and from October we will go national," Bharat said.

The company expects to roll out 10,000 units in its first year of launching, Bharat said, adding that the `vitreous-enamelled' water heaters would add about Rs 3.5 crore to the total turnover of the company.

"The new products will be produced in our Faridabad manufacturing facility which has a capacity of about 24,000 units per annum and with additional investments, we will double the capacity by next year," he said.

The company plans to phase out the existing range of water heaters if the new range takes off well, he added.

"The company will export 20,000 units per year of the new range to Denmark and CIS countries but they will be of different designs approved by the Denmark company," Bharat said.

The company recorded a turnover of Rs 100 crore in 1998-99, he said, adding that water heaters accounted for about 18 per cent of the total turnover.