The company also plans to set up another plant at Uttaranchal to manufacture 1 million air conditioners with an investment of about Rs 60 crore. The latter will be done through its joint venture with Fedders International. The former will be Voltas own investment.
Company sources said though 11.5 acres land in the hill state has been bought, the project has yet to be approved by the Board.
Voltas which used to contract manufacture refrigerators for LG, Samsung and Haier, at its Hyderabad unit, has stopped contract manufacturing since July 31, 2005.
Our objective is to close down the factory as we are incurring heavy losses. We are currently holding negotiations with the workers union, a senior company official told FE.
In The Cold Storage
| Loss making unit to be closed by December |
Two new facilities in Uttaranchal on cards
The first will be a Rs 15-20 crore
unit to manufacture commercial refrigerators & water coolers
The other will be a Rs 60 crore
JV to make 1 million air conditioners
One reason for such focus on tax free zone in Uttaranchal is that Voltas tax benefits have been withdrawn from its Dadri facility where it makes 2.5 lakh AC units annually. Capacity at Dadri is not sufficient, the company official said and added that the Dadri plant will continue to manufacture for the Western region. The company may, however, transfer some plant and machinery from Dadri plant to the proposed new facility.
ACs contribute about one-third of the total turnover of Voltas. The brand which was in 2001 dethroned from its leadership position by US major Carrier curretly is back as the No 2 player in the AC market.