Voltas To Absorb Allwyn White Goods Business

Voltas has decided to merge the operations of Allwyn's white goods business with itself. The decision follows recommendations of a committee constituted by the Voltas board to examine the problems of the company and to access the additional inputs necessary to accelerate its return to profitability.

As per the merger proposal, the white goods business of Voltas and Allwyn will now have a common distribution, marketing and backup system. The company is also working on a pricing strategy for the Voltas and the Allwyn brands so as to target different segments of the market, top Voltas sources said.

`Allwyn is a very strong brand in the South while Voltas has a strong presence else where', a Voltas official said. `The merger will help in cutting costs as both the units will have a common marketing and distribution network, the official added. Allwyn currently produces 2.75 lakh refrigerators per annum. The company has managed to improve its sales in 1995-96 though the profitability of both Voltas and Allwyn was under pressure owing to the sluggish market demand. Voltas had reported a Rs 4.9 crore loss for the first half of the current financial year. The loss, a first in the history of the company, had been attributed primarily to external problems that had affected the most of the company's units.

 

Voltas had taken over the white goods business of Hyderabad Allwyn Ltd in 1994 as part of a BIFR rehabilitation scheme. In the following period the company has launched several new models including, frost free, busy cooler, deep freeze, bottle cooler, and eight variations of the international soft look model.

Voltas, which had a 13 per cent market share before taking over Allwyn, currently boosts of a combined 20 per cent market share. During the intervening period 1,000 of the 5,000 employees of Allwyn opted for VRS.

Voltas also relaunched the cupboard business of Allwyn. Under the new management Allwyn also launched its own range of office furniture, in technical collaboration with Listas. During the last quarter of last year a furniture manufacturing unit was started at the existing Allwyn locales in Hyderabad.

The Allwyn unit has various manufacturing plants with the principle one being at Sanatnagar in Hyderabad, with a second largest one being at Nandalur near Tirupathi.