Korean multinationals, LG and Samsung in consumer durable market, have mauled BPL badly. BPL had sold more than one million CTVs for three consecutive years till 2001, with 30 per cent plus market share. The companys share of colour television market contracted to 9.2 per cent in January 2003 and to 4.5 per cent during the World Cup cricket season in February 2003 when it sold only 30,000 CTV. LGs market share improved from 16.3 per cent in January to 18.6 per cent in February 2003. The second largest competitor Samsung also increased its market share from 12.8 per cent to 16 per cent in two months.
In the first quarter to March 2003, CTV market size has grown by 59 per cent to 13.78 lakh CTVs but BPL failed to cash in on the opportunity. Besides CTV, BPL is losing its strength in other product segments like refrigerators and washing machines to multinationals.
BPL will launch 16 new CTV models, including 21-inch pure flat and 29-inch super flat models as well as several multimedia products including LCD projectors, digital cameras, DVD players and Worldspace Radio in the current year to recapture market.
Tata Sponge Iron
Tata Sponge Iron (TSIL), a Tata Group company in which Tata Steel has a 40 per cent equity stake, is riding the wave of bullish steel prices. The company makes sponge iron, a raw material used in steel making. Both, demand for and price realisation of steel, have been improving that indicates that any fresh supply of sponge iron will be absorbed by the market. During FY 2002-03, TSIL has recorded an acceptable production of 2.36 lakh tonne, 99 per cent of capacity utilisation. It was 8,000 tonne or 3.5 per cent higher than that during the previous year.
Net sales grew 26.1 per cent to Rs 39.2 crore during the quarter to March 2003. A bulk of growth must have come from higher price realisation than the growth in sales volume. Its share of sales came down to 51.8 per cent from 66.7 per cent, despite a rise in the price of coal that accounts for 70 per cent of total raw material cost.
Lately, India has become one of the largest producers of sponge iron in the world. Consequently, TSIL is expanding its sponge iron manufacturing capacity to cash in on the likely boom. This is being done through the installation of the third kiln with a capacity of 1.5 lakh tonne per annum, that will raise capacity to 3.9 lakh tonne. The estimated cost of expansion is pegged at Rs 67.4 crore. The project is being financed through borrowings and retained earnings.