Global Chimney Major To Make India Regional Hub

New Delhi: | Updated: Jan 22 2003, 05:30am hrs
Competition in the electric chimney segment is hotting up, with one more Italian major finalising ambitious plans to enter the country. Elica Spa, which was initially marketing its chimneys under the Deeshe Elica brand name through a technical collaboration with Deeshe, has now decided to make a solo foray into the country. It plans to develop India as a major manufacturing, marketing and distribution hub for its expansion plans in the sub-continent and the Far-East. The company, which is the largest manufacturer of electric chimneys and hobs, with supplies to over 120 OEMs worldwide, would also look at OEM manufacturing in India.

While the parent companys product portfolio includes dish washers, built-in ovens and small kitchen appliances, it will market only chimneys and hobs in the country.

We are investing Rs 100 crore initially in setting up a manufacturing unit in Gurgaon, spread over a 100,000 sq ft area, says Elica India chief executive officer Aman Makkar. With an initial annual production capacity of one lakh units, it plans to increase this to 2,50,000 units, once its supplies in the region stabilise. The unit will cater to the Bangladesh, Sri Lanka, Maldives, Mauritius and Nepal markets also, which are expected to contribute at least 25 per cent of volume sales. At a later stage the Gurgaon facility may also feed the Gulf market. The Gurgaon facility will be Elicas first unit outside Italy. The company has seven facilities in Fabriano, Italy.

The company is also investing Rs 15 crore in its marketing initiatives that include the setting up of special Elica Galleries besides shop-in-shops at FMCG and sanitary counters. The first of its galleries will be opened in Delhi by January-end. Bangalore, Hyderabad and Chennai have been targeted for the second phase of expansion. By the end of 2003 it expects to have a presence in all the metros. It has set aside a budget of Rs 5 crore for advertising and promotional activity.

The chimneys market, which has been estimated as a 30,000 units a year market valued at Rs 200 crore, has been growing at a rate of 20 per cent. The companys major thrust will be on the traditional chimneys market, which is the segment other players like Faber Heatkraft, which is the market leader, Kaff, Glen and Deeshe are also active in. Elica will launch six specially designed models in the Rs 4,900 to Rs 7,900 price range and 10 models in the decorative segment in the Rs 9,000 to 45,000 range. Hobs are priced at Rs 8,000-Rs 35,000.

The company will set up a centralised customer service centre with a staff of 25. Says product manager Rajoo Kak,We will be putting in place a strong service network, with two service technicians and two sales representatives at every dealer outlet and four service technicians at the galleries.

With 80 per cent of the market being in the organised sector, Elica is targeting a 65 per cent market share in the first year itself, on the basis of superior features, service back-up and quality.

Elica Spa, which enjoys 93 per cent share of the global production market of kitchen appliances, has an annual turnover of euro250 million and has a combined manufacturing base of 2.5 million units.