India Inc. can outsmart Chinese goods: Havells India

With manufacturing at the core of Prime Minister Narendra Modi's "Make in India" campaign and labour costs in China eating into margins, India's electrical goods manufacturers see little threat today from cheap imports, says Havells India chief Anil Rai Gupta.

"The competition will be there. But the threat of unhealthy competition is over. We offer a much higher quality, 'Made in India' products at competitive costs," Gupta said, launching his group's power-saver range of "Lumeno" LED lights and "ES-40" fans in this Rajasthan town, some 120 km from the national capital, over the weekend.

The chairman and managing director of the Rs.8,000-crore group, which counts Sylvania, Standard and Crabtree in its stable of brands, said at the facility in this Rajasthan town that the threat of unhealthy completion from Chinese electrical goods was no longer relevant.

Manufactured at its Hardwar plant in Uttarakhand, Havells -- which has entered its 40th year of operations -- also showcased the ES-40, claimed to be India's first 40-watt fan, costing less that Rs. 2,000. "It can cut household electricity bill by as much as 17 percent."

Conventional fans consume around 75-80 watts and account for around 35 percent of a household's electricity consumption in India. Replacing one conventional fan with ES-40 can save a consumer, who runs a fan for 16 hours a day, up to Rs.1,020 a year.

The company also introduced at the event a new range of miniature circuit breakers, residual current circuit breakers and electrical safety devices, under "Euro-II" series for Indian market and said these were entirely "Made in India".

"The faith in Indian manufacturers is growing with maturity of consumers. They are no longer looking for low-quality, cheap products. They are buying products that give them higher returns -- both in terms of longevity and energy savings," Gupta told IANS.

"This explains the increasing popularity of our products even in Tier-III cities and rural areas," he said. "Innovations at three levels - branding, distribution and manufacturing technology -- have helped tide over the challenge posed by cheaper alternatives in the market."

Gupta said in innovation and manufacturing, Havells set up plants comparable to the best in the world with global scale of operation, besides putting in place efficient manufacturing systems required to produce such quantities of high-quality goods at low cost.

"Innovations at all these three levels have been the driving force that has helped us post double digit growth over the past five years. We compete with both domestic and low-cost products from countries like China," Gupta noted.

"Our return on capital and return on equities has been the highest in the industry."

On the LED lighting segment -- a Rs.850 crore market in India, slated to grow at 45 percent annually -- Gupta said his company has set a target of Rs.600 crore of revenues over the next two years. "LED will be at the core of our strategy for the lighting and fixture segment."

Havells also claimed a 14 percent market-share in the highly competitive, Rs.5,500 crore fan market. It has targeted Rs.1,000 crore revenue and 16 percent market share in this segment over the next two years.

(Gokul Bhagabati can be contacted at gokul.b@ians.in)