Havells in $50-m lighting venture with Shanghai Yaming

New Delhi: Electrical equipment manufacturer Havells India has formed a 50:50 joint venture with China's Shanghai Yaming Lighting Company Ltd to set up a lighting products unit in China.

The venture, named Jiangsu Havells Sylvania Lighting Co, will invest $50 million and target annual revenue of $100 million in next three years, the company said on Monday.

Havells' Joint Managing Director, Mr Anil Gupta, said the plant is slated to begin production by April.

The venture will produce energy-efficient and green lighting products for the Chinese and international markets.

Havells, which gets half its revenue from Germany's SLI Sylvania (acquired in 2007), said in July that it was looking for a joint venture partner in China to boost sales and set up a manufacturing facility.

More viable
“Manufacturing in China is commercially more viable,” Mr Gupta said in explaining the reason for setting up the joint venture. Shanghai Yaming Lighting Co, a unit of Shanghai Feilo Acoustics, makes various types of lamps and lighting products in China, Japan, Belgium and the US.

The joint venture, Havells said in a statement, would facilitate constant innovation and quicker product releases in international markets, including a co-owned, reliable and stable supply source in China. Havells already exports products to China, generating $5-6 million of revenue a year.

The company has 12 plants in India and six overseas. The initial investment will be funded internally, although the joint venture may consider a debt issue in China later as it scales up production, Mr Gupta said.

Havells to enter small home appliances business

NEW DELHI: Electrical equipment maker Havells India will start selling small home-andkitchen appliances from July, hoping to profit from a Rs 5,200-crore market currently dominated by Philips, Panasonic, Morphy Richards and Bajaj.

Havells' product line-up will include mixers, irons, hand blenders and cooking and brewing appliances.

"The small home appliances segment is all set to boom," said Havells India joint managing director Anil Gupta said, adding that Havells would use its brand recall in the lighting segment to position itself in the home appliance space.

Havells will outsource 70% of manufacturing to local vendors and the rest to its partners in China , where its design centre will be responsible for developing the products.

The company, 30%-owned by QRG Enterprises, plans to invest Rs 70 crore in marketing its small appliances range over the next two to three years. A part of investments will also go into research and development.
Sales of domestic home appliances are growing at 15-18% every year. Premium appliances, which contributes a fifth to the total market, are growing even higher at 30-35%.

Gupta said the products would be priced competitively and will be comparable with those of Philips and Panasonic.
Some other prominent players in the segment include Usha and Maharaja Whiteline.

Havells products will be initially sold in top 40 cities through some 4,000 outlets retailing electrical goods. The products will also be sold through 115 exclusive Havells Galaxy stores, which will be increased to 200 by the end of this financial year.

The company also plans to export its products to Latin America and Thailand using the distribution channel of Sylvania, which it bought in early 2007. This acquisition had catapulted Havells into the top league of lighting equipment makers, behind Philips, Osram and GE.

Havells, which clocked a turnover of. Rs 5,600 crore in the year ended March'11, also sells fans and launched its water heater range in October last year.