Onida Recasts Business On Product Lines

The Mirchandani brothers of Onida have reworked their Rs 650 crore business empire in a first major attempt at rejuvenating their dipping fortunes in the consumer electronics industry.

Under the new framework, all marketing, sales and distribution of products will be handled by two companies while the other two companies of the group will concentrate only on manufacturing.

In doing so, the brothers have dispensed with the earlier model of geographical division of their business and have instead focused on dividing their business on the basis of products.

Mirc Electronics, the Mumbai based arm of the group will market, sell and distribute audio and audio visual products including colour televisions, black and white televisions, video cassette records and audio products all over the country. Hitherto, its presence was restricted to only west and south. Monica Electronics, the Delhi based company, will cease its marketing activities and transfer its marketing and distribution infrastructure to Mirc Electronics. It will focus only on manufacture of colour TVs and sell them to Mirc.

 

Onida Savak will continue to manufacture and market the Onida range of washing machines. Onida Saka, the black & white television arm of the group will only manufacture black & white televisions. It will sell them in turn to Mirc Electronics for marketing.

The new structure means that the Onida group will have two marketing companies and two manufacturing companies. However, Mirc Electronics will continue to make colour TVs at its existing production facilities. They will not be transferred to Monica Electronics.

Pramod Khosla, deputy general, manager, Mirc Electronics, said the process began in April 1997 and was completed by December 1997.

The Onida group was run through a complex maze of companies which manufacture and sell TVs. The colour TVs under the Onida brand name were being marketed by two companies. In the North and East, Sonu Mirchandani did the marketing through Monica Electronics while in the west and south marketing was through Mirc owned by elder brother Gulu.

Besides, Sonu also diversified into the manufacture of black & white TVs through Onida Saka and then into electronic tuners and washing machines through Onida Savak.

The reworked arrangement has seen Gulu Mirchandani gain even further.

The washing machine business contributes to only about 10 per cent of the turnover. The biggest contributor to Onida's turnover is the colour TV segment