Electrolux Sees No Recast Or Loss

Major restructuring at Swedish appliance maker AB Electrolux will not affect its investment plans in India, a senior company official said.

Electrolux last week announced a $321.6 million restructuring plan. The appliance maker will shut 25 of its 150 plants and cut 12,000 staff as part of the plan. I dont expect any changes in India, said Craig Ibsen, chairman and managing director of refrigerator-maker Maharaja International Ltd (MIL), a unit of Electrolux. There is no move to reduce or subcontract operations. We are in a growth phase and our investment plans are on course, he said.

Most of the cuts of the restructuring will come in developed markets such as the US and Europe, where growth has been flat.

 

Electrolux holds 51 per cent stakes in both MIL and washing machine maker Intron Ltd. The Swedish firm owns a 40 per cent stake in water purifier and vacuum cleaner maker Eureka Forbes Ltd. Ibsen said both MIL and Intron would report losses for 1996/97 (April-March) year but he declined to give details. MIL is due to announce its results next week. He said MIL was proceeding with its one-for-one rights issue that would double the companys paid-up capital to Rs 68 crore.

The rights issue closes on July 1, and we have the option to increase our shareholding from 51 per cent to 74 per cent if the issue is not fully subscribed, Ibsen said. He said the funds would be used to double annual refrigerator production capacity to about 400,000 units.

sen said production of Kelvinator-branded refrigerators had taken precedence over Electrolux-branded ones as demand for the Indian brand name was high.

We have stopped producing Electrolux-branded refrigerators. Kelvinator is our most important brand in India and we will concentrate on that for the moment. Were adding washing machines to the Kelvinator product range now, he said. MIL will make Electrolux-branded refrigerators, but only next year, said Ibsen.