The Hindu Business Line : Phoenix Lamps to expand capacity, eyes 20% growth

PHOENIX Lamps Ltd, a leading manufacturer of automotive lamps and compact fluorescent lamps, is planning to set up two new manufacturing units in order to achieve its target of becoming a Rs 500-crore player by 2008.

According to Mr H.R. Gupta, Managing Director, Phoenix Lamps Ltd., the company would require a capacity of 150 million to achieve its revenue targets.

"We plan to spend about Rs 15-20 crore per annum towards capacity expansion. Most of this would be generated through internal accruals," he said.

The company's total production at present is about 50 million lamps per annum.

While Phoenix's new unit in Noida will be totally export-oriented, the second unit that is coming up in Uttaranchal will cater to domestic demand.

The new units will take the company's annual production to 80 million units.

The company is targeting a 20 per cent growth in revenues this year to Rs 200 crore with about half of the sales coming from export markets.

"We export to over 40 countries with the key markets being USA and Europe.

Good growth is expected in both the markets, particularly the USA. And with the day-light regulation (in which vehicles plying on highways are required to keep headlights on during the day) coming up in more European countries, the demand for our products should see high growth," Mr Gupta said.

In the domestic automotive lighting segment, Mr Gupta feels it is the two-wheeler segment that will be the key growth driver. "An increasing number of two-wheelers are now shifting to halogen lamps and the number of two-wheelers produced in the country is also very large," he said.

Incidentally, Phoenix claims to control over 90 per cent of the halogen lamp market in the country.

The company is also an OE supplier to about 36 clients and has a market share of about 35 per cent in the domestic automotive lamps segment.

Meanwhile, to counter the pressure on margins due to rising raw material costs, the company said that it has undertaken several initiatives to cut costs and is able to reduce costs by about 5-7 per cent every year.

With the automotive lamps and lighting business more skewed towards the winter months, company officials expect sales to pick up in the coming period.

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