Swedish major Electrolux and Korean chaebol LG are among the forerunners for the possible tie-up.

The company, at its plant in Dadra, has unutilised capacity which it plans to optimally utilise through such contract manufacturing tie-ups, Voltas vice-president, unitary products, SN Tripathy said.

Capacity at the Dadra unit has recently been doubled to 1.5 lakh per annum, and is operating at 50 per cent capacity utlisation.

Company insiders said that some multinationals have already visited the Voltas unit, as a precursor to the capacity sharing arrangement. Tripathy confirmed that transnationals like LG and Electrolux have visited the Voltas facility at Dadra. Voltas has such tie-ups in refrigerators with transnationals like LG of Korea.

The company's room air-conditioning business has also been separated from its earlier Air-Conditioning and Refrigeration business group and put under a unitary products group, while the industrial air-conditioning business operates as a separate division.

Voltas was the unchallenged numero uno player in room air-conditioners in India, but has been toppled from the top slot by the US-based major Carrier Aircon.

Multinationals like LG and Samsung since have also entered India, but mainly sell imported products in the country. Most of them have only managed to be a niche player, with the unorganised sector posing a major challenge to all branded products. The lowering of excise duties have also helped the small-scale players in recent years.

Tripathy told The Financial Express: "The division has targeted a 40 per cent growth with an investment of over Rs 20-30 crore, both for room air-conditioners and cooling systems."

Tripathy added that the company plans the unitary products division to be the topline priority of the Voltas management. The division has targeted a extensive dealership network of over 1,000 in the next one year.

The unitary products division has a turnover of Rs 400 crore, out of which room and split ACs contributed Rs 200 crore while the refrigeration and cooling systems business generated the balance.

Voltas has gone through a major shake-up over the last two-and-half years after it posted its first ever loss in 1996-97, when it posted a net loss of Rs 16.82 crore.

Since then the company has sold its thermostat division to Seibe plc of United Kingdom, spun off the white goods division into a joint venture with Electrolux from which it plans to exit in the future, and sold its chemicals division to group company Rallis. Voltas has also sold its stake in joint venture SMS India to the German partner, as part of the turnaround exercise.

Allwyn turns around on better productivity
Voltas' loss making Allwyn unit has finally broken even. A major portion of Allwyn, the loss-making public sector company which it acquired in 1994, has been hived off into a joint venture with Electrolux.

The Hyderabad unit of Allwyn, the unit that now remains with Voltas, is engaged in the manufacture of commercial refrigerators and the Allwyn brand of office furniture.

The company ascribed the turnaround to the substantial increase in productivity, paring down of labour force and introduction of 20 new models with the last 18 months.

Of the 4,800 workforce at the Allwyn unit, around 1,700 were transferred to the venture with Electrolux, while over 1,320 accepted a voluntary retirement scheme.

Voltas also plans to invest around Rs 27 crore modernisation and balancing of equipment at the Hyderabad unit to cater to growing demand, which will be funded through internal generation. The upgraded plant will be ready by June next.

The company also said its office furniture business has increased by 200 per cent over the last two years.