Voltas mulls brand extension; may diversify in consumer goods space

KOLKATA: The Tata group-owned cooling company, Voltas, is planning to extend its brand into other product categories. The company may consider diversification in the consumer durables and electronics segment. According to the company, a call is likely to be taken by December this year.

Voltas is presently conducting a study in association with the group owned TSMG for extension of product line.

“Studies are on but we cannot peg a time or name any category. By the end of this year, we might have some idea about extending the brand. We are planning to go for brand extension,” said Voltas CEO - unitary products division Pradeep Bakshi. 

However, Bakshi did not mention when the study is likely to be completed.

Also, the company is eyeing further expansion into the overseas market in the Middle East and Africa.

“Our target is to export at least 1,00,000 units in a year over the course of the next two years, which will account for 10 per cent of the annual sales,” Bakshi said.

The company is presently exporting between 25,000 and 30,000 units to its overseas operations annually, which accounts for roughly five per cent of the annual sales.

Voltas will also go for marginally hiking its prices of air conditioners by two—three per cent in face of rising forex imbalance and government taxes by mid-February. “Our forex and government taxes have gone up by five per cent. While we will absorb a part of this, the prices of our air conditioners (AC) will go up by two—three per cent in the middle of February,” Bakshi said.

In case taxes go up further, which will add to input cost, the retail prices of the ACs may head further north, he added.

Experts feel that the Union Budget 2016 is likely to lay out a roadmap for what is important for the BJP-led government at the Centre.

While the company continues to enjoy market leadership position in the AC segment at 25 per cent by sales figures, its biggest challenge is lack of diversified products. It should be noted that Voltas had quit the consumer refrigeration business in 1998-99.

Voltas registered an annual growth rate of 12 per cent selling nearly one million ACs in 2014 and is optimistic about closing the current fiscal on a good note.

“We are also focusing on strengthening our channel partner base and opt for brand shops to further increase our presence,” Bakshi said.

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