Havells India expands into electronic manufacturing service

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Havells India expands into electronic manufacturing service

Havells India expands into electronic manufacturing service

Industry News
Jul 14,23

The move to enter into contract manufacturing space for appliances such as air conditioners and washing machines comes in response to the growing demand from global brands to establish manufacturing bases in India.

Havells India expands into electronic manufacturing service

Havells India, a leading manufacturer of fast-moving electrical goods, is expanding its operations into the electronic manufacturing service (EMS) or contract manufacturing space for appliances such as air conditioners and washing machines. The move comes in response to the growing demand from global brands to establish manufacturing bases in India. Anil Rai Gupta, the chairman and managing director of Havells India, announced the company's plans.

Havells has already initiated manufacturing and product designing of air conditioners for certain global brands in markets like the Middle East and the US on a pilot basis. The company aims to leverage its significant investments in building manufacturing lines and capacities for its own brand, Lloyd, by utilizing spare capacity for contract manufacturing for overseas brands. This strategy aligns with the "China plus-one" manufacturing approach adopted by many global brands. Havells intends to exclusively manufacture for brands sold overseas to avoid competition with its own Lloyd brand of appliances. Additionally, the company is ensuring that the products meet the specific norms and standards of these international markets.

Anil Rai Gupta stated that Havells aims to achieve revenues of Rs 1000 crore from contract manufacturing over the next three to four years. Initially, the company will focus on manufacturing air conditioners, leveraging its existing state-of-the-art plant with excess capacity. Subsequently, Havells will expand into washing machine production, for which a dedicated plant has already been established. Gupta further added that as Havells continues to establish manufacturing plants for its own products, they will gradually venture into contract manufacturing for other appliances.

Havells has invested over Rs 900 crore in the manufacturing facilities thus far. The company's current production capacity includes two million air conditioners and 680,000 washing machines. While refrigerators and televisions sold under the Lloyd brand are currently manufactured by contract manufacturers, Havells plans to set up a dedicated plant for refrigerators, representing another significant investment. In the fiscal year 2022-2023, the Lloyd business witnessed exceptional growth, with a year-on-year increase of 49 per cent to reach Rs 3,369 crore in revenue. This growth occurred despite challenging market conditions characterized by high inflation and sluggish consumer demand in the home appliances and television industry.