BPL outlines plans for business groups

The Rs 1,000 crore (Rs 10 billion) BPL Ltd, as part of its ongoing restructuring initiatives, has lined up strategic plans for consumer business group (CBG) and electronic manufacturing services business group (EMSBG) units.

The company also intends to upgrade itself to an "original design manufacturer" from an original equipment manufacturer.

In a statement to shareholders, BPL chairman and managing director Ajit G Nambiar says: "The consumer business group will concentrate on the production, sales and distribution of traditional consumer electronics, home appliances as well as the new range of digital mobile phones and multimedia products. These products will largely be sourced from the company's manufacturing facilities or from other approved vendors that meet quality and technology standards of the organisation. This group will also handle all new product development and R&D initiatives for the products sold through the group."

This strategy is in sync with BPL's initiative to treat its key businesses separately.

The company's manufacturing business will support sales and marketing businesses.

This approach is aimed to ensure full utilisation of capacities and capabilities.

The strategy will also segregate businesses that operate on different channels and are not dependent on the consumer electronics retail network such as healthcare and soft energy.

The consumer business group will also spearhead BPL's initiative of introducing high performance and high quality digital audio and video products that offer double-digit growth opportunities such as analog and digital display products, home theatre-in-a-box, optical playback - VCD/DVD, mobile handset and accessories, wireless communication solutions and lithium ion rechargeable batteries.

Nambiar, explaining the rationale for this move, has stated that these products are expected to enhance the offering to the trade and will also help the company move from the analog to the digital platform.

On original design manufacturing, Nambiar said: "Though contract manufacturing has mainly been associated with pure manufacturing and assembly, brand owners are progressively increasing the content of outsourcing to include even product design and development. Contract manufacturers are shifting gradually from being original equipment manufacturers to original design manufacturing and this moving up the value-chain clearly would have a positive impact on the realisations for a company. BPL has developed superior design and developmental skills which can ideally be used to help it graduate from an OEM to ODM."

As a step towards this move, the company's electronic manufacturing services group will take full charge of utilising the available capacities of automation and PCB plants, as well as specified lines at the its manufacturing units.

The company has also stated that it is pursuing value-added acquisitions.