Wipro Consumer plans furniture plant

From sourcing products to owning manufacturing facilities, that's the roadmap laid out by Wipro Consumer Care and Lighting (WCCLG) for its modular office furniture business.

WCCLG, the FMCG arm of Wipro Limited, which commenced furniture business operations in 2004, plans to set up a major office furniture manufacturing unit at Aurangabad (Maharashtra) in coming months.

WCCLG, the FMCG arm of Wipro Limited, which commenced furniture business operations in 2004, plans to set up a major office furniture manufacturing unit at Aurangabad (Maharashtra) in coming months.

Speaking to Business Standard, WCCLG President Vineet Agrawal said, "Except for the ergonomically designed chairs that are currently manufactured at our plant in Chennai, we source modular office furniture from different vendors across the country.

 

These vendors deliver products as per our design specifications and toolings. But as speedy execution of orders is a key aspect of the business, we are planning to have our own manufacturing unit."

Though he did not divulge the number of vendors and the manufacturing capacity of the proposed Aurangabad plant, he said, "Even after the manufacturing plant becomes operational, we will continue to retain some of the key vendors keeping in mind the short product delivery time on our hands."

The furniture business accounted for nine per cent of WCCLG's sales of Rs 1,462 crore in the FY08. This business along with the commercial and institutional lighting business of WCCLG recorded a 35 per cent year-on-year growth in FY08.

The company, however, has chosen to be cautious while projecting targets for FY09 in the backdrop of rising inflation and global credit crunch, which is slowing down the real estate market.

Agrawal said, "Our overall results for the fourth quarter ended March 31, 2008, is no indicator of a slowdown in the furniture business. Our major customers are Siemens, Ericsson, Honeywell, Bharti and Reliance Anil Dhirubhai Ambani Group (R-ADAG) and they have not put their expansion plans on hold. However, we are cautious."

On the overall performance of WCCLG including the acquisition of Singapore-based Unza Holdings, Agrawal said the revenues recorded in fourth quarter of FY08 touched Rs 480.4 crore, a growth of 128 per cent and a profit before interest and tax (PBIT) of Rs 61.3 crore, a growth of 87 per cent year-on-year.

The company's flagship brand Santoor witnessed a 29 per cent growth and moved to the third position in the country's toilet soap category.