Anchor switches attention as it eyes diversification

Gameplan is to bring down dependence on switches from 90% to 70% in the next few years

In its drive to convert Anchor, the manufacturer of well-known switch brands such as Roma,  into a well-rounded electricals company, Japanese major Panasonic, which acquired the firm three years ago, has prepared a blue-print aimed at enhancing its presence in areas such as lighting, cable & wires, fans and circuit breakers.

In the process, Panasonic will take a leaf out of the marketing manual of archrival Havells, which began as a switchgear company over two decades ago moving quickly into areas such as lighting, luminaires, fans etc. Today, Havells is one of the largest manufacturers of electrical components in the country with its domestic operations alone clocking sales of Rs 3,622 crore (turnover for the fiscal ended March 2012). Another Rs 3,000 crore came from its international operations for the 2011-12 financial year.

 

While the Rs 1,800-crore Anchor, which is based in Mumbai and is a 100% subsidiary of Panasonic, has been slower to bite the bullet, it is now moving quickly in an attempt to play catch-up. The company recently launched circuit breakers in markets such as Mumbai, Goa, Bangalore and Chennai. "The gameplan is to take this national in the next few months," Anchor's joint managing director Dinesh Aggarwal said. It has also set up a new plant to manufacture fans in Valsad, Gujarat, he added.

Besides, Anchor has also acquired a compact fluorescent lamp (CFL) maker called Globus in Roorkee, Uttarakhand in an attempt to expand its light- manufacturing capabilities. This acquisition will allow Anchor to manufacture spiral CFL lamps besides regular lamps.

The moves are expected to help Anchor take up its revenues from allied electrical products to 30% from the current 10% in the next few years. The contribution of switches, meanwhile, is likely to drop from the current 90% to 70%, Aggarwal said.

Even as Anchor increases its focus on new product categories, it is not ignoring switches altogether adding brands below as well as above Roma,  a mid-priced product selling at Rs 35 per unit, in a bid to straddle all price points. Products below Roma include brands such as Rider, launched at Rs 28 per unit, while above Roma, Anchor has brands such as Viola and Woods at Rs 42, Panasonic Vision at Rs 55 and an imported product called Ave at Rs 120.

These additions are expected to help Anchor galvanize its operations in the retail and residential segments - big areas for electrical component makers. But Anchor proposes to devote its attention to the institutional segment as well, an area where it has no meaningful presence at the moment. Its acquisition recently of Bangalore-based fire protection and security solutions provider FirePro was a step in that direction, Aggarwal said. The acquisition will help Anchor take up turn-key projects something it has been looking to do in an attempt to diversify.