Consumer durables major Godrej today said it has postponed its plans to set up a production facility in South India citing adverse market condition and stated its existing capacities will be sufficient for the next 2-3 years.
"We have expanded our capacities last fiscal. Moreover, the consumer durables industry did not do well in last year. We have postponed our plans to set up a new plant as our existing capacities will be sufficient for the next 2-3 years," Godrej Appliances Executive Vice President (Marketing and Sales) Kamal Nandi told PTI.
The company was scouting for locations to set up the plant, but has not finalised anything, he added.
"In the first five months of this fiscal, the appliance industry has witnessed mixed reactions. While refrigerators did very well, air conditioners are not doing good as the peak sales months of March and April were cooler this time," Nandi said, adding washing machine segment is doing well.
Overall, the industry has witnessed a growth of 10-12% so far in this fiscal, he added.
In March this year, Godrej & Boyce Manufacturing Co had said it will set up a new manufacturing plant for home appliances in South India in the next four years that could entail an investment of about Rs 100 crore.
The plant was proposed to have an initial capacity of 10 lakh units a year.
Currently, the firm has two plants for home appliances at Mohali in Punjab and Shirwal near Pune in Maharashtra.
These plants have a total production capacity of 2.4 million units annually and manufacture various goods like refrigerators, air conditioners, washing machines and microwaves.
The company had invested Rs 100 crore to expand the capacity to 24 lakh units from the earlier 18 lakh units.
Godrej Appliances today launched a new range of 'energy efficient' refrigerators Edge Pro, priced between Rs 14,000 and Rs 18,250.
On sales expectations, Godrej & Boyce Manufacturing Co Assistant Vice President (Refrigerators, Godrej Appliances) Jayesh Parekh said, "We are expecting our refrigerator sales to grow by 30-40%."
The company had sold 14 lakh units in 2011-12 and exports contributed around 5% to this, he added.
"We are also targeting to increase our market share by 4-5% from existing 18% in refrigerator segment," Parekh said, adding the market is estimated to be around 80-90 lakh units annually.
When asked if the company would consider raising the prices of its products due to rising raw material prices, Nandi said a decision to this will be taken after the festive season.
