After a year of steady increase in cost of key materials, Havells is now planning to hike prices of its consumer durable products again. According to the company's chairman and managing director, Anil Rai Gupta, in the coming new year consumers would have to spend 7-8 per cent more to purchase its products.
The Noida-headquartered firm markets its consumer durables portfolio that includes large appliances like air conditioner, washing machine, refrigerator and LED television under its brand Llyod.
"Given the kind of cost increases we have incurred so far, we have to pass on at least an extent of it to consumers in coming weeks. While the extent of hike will vary for different category of products, we may have to opt for a 7-8 per cent hike in early next year", Gupta told Business Today.
The company has already hiked prices in the current year. After the next round of increases, prices may stabilise. According to him, cost of materials has begun to cool off, while there has not been any major increase in the cost of logistics of late.
Expanding capacity
To grow its presence in the country's Rs 1 lakh crore a year home appliances market, Havells has invested over Rs 500 crore in setting up two plants in Gihlot, Rajasthan. The two plants - each dedicated for manufacturing air conditioners (AC) and washing machines - have been set up at industry 4.0 standards.
Currently, the AC plant has a capacity of shipping out 1,200 units per 8-hour shift while the washing machine plant's capacity is 600 units per shift.
Air conditioners that are being made in the Gihlot plant would be exported to over 25 countries, said Gupta.
Built in line with the government's Make in India initiative, Havells is focusing on growing the local value addition rapidly.
It has already applied under the Production Linked Incentive (PLI) scheme for SC components and the plant is equipped to meet all the criteria.
"We are already making several key components here, like heat condenser, coils and other key parts," said Gupta.
According to the company, nearly 70 per cent of AC parts - including metal pipes and outer body parts for both indoor and outdoor AC units are manufactured in the plant.
Among key components, Havells continue to import compressors due to lack availability of locally made compressors. While for washing machines only the motors are being sourced from Chinese vendors.
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