Electrolux Kelvinator to merge with Videocon

Consumer durables maker Electrolux Kelvinator Ltd will merge with Videocon Industries by next year, Electrolux managing director Anirudh Dhoot said on Tuesday.

"We are planning to merge Electrolux with Videocon Industries shortly, maybe next year," he said in New Delhi, adding that a decision on the deal would be taken at the company's board meeting scheduled after Diwali.

He further said that since Videocon took over Electrolux in July this year, sales has been good and the company would breakeven by March next year and begin making profits from there. The company follows the calendar year from January to December.

Electrolux is targeting a turnover of Rs 400 crore (Rs 4 billion) till December 2005, Dhoot said launching the festive season offers. It is eyeing an overall sales growth of 40 per cent during the festive season and targeting to achieve 300 per cent growth in microwaves and 150 per cent growth in the air conditioner category.

The company would spend around 12 per cent of its turnover on ads during the festive season.

The company is also considering integration of its plants in Maharashtra. "We are working on a possible merger or relocation of our Butibori plant which is a small plant and just 60 kms away from our Warora plant. The process of integrating the plant is on," Sanjeev Wadhwa, general manager, marketing said.

Electrolux is also planning to relaunch its Kelvinator brand with focus on rural areas. "A decision is yet to be taken, but we are thinking of launching Kelvinator brand which deals in refrigerators only. The refrigerators produced under the brand would be targeted at the low end market," Wadhwa said.

He further clarified that there would be no cannibalisation of products amongst the group companies even as they perform as separate entities.

In a deal between Videocon and the Indian arm of AB Electrolux, Electrolux Kelvinator Ltd, which took place in July this year, Videocon got the right to market three brands Kelvinator, Allwyn and Electrolux in India.

Under the deal, Videocon took over the three manufacturing plants. It also gets an opportunity to tap the global market as it will supply refrigerators and washing machines to Electrolux over the next five years.