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Mayur N Shah

Unlike other manufacturers, Amara Raja has opted for a single point manufacture and distribution

Mumbai , Dec. 27

Amara Raja Batteries plans to become the largest player in the battery retail market by 2011. To get at the goal, the company will infuse Rs 90 crore (bank borrowings) into the on-going expansion of its Tirupati plant.

Production of batteries will go up from one million units annually to 3.5 millions by January 2007 and 5.5 millions by 2008, said Mr Jay Gala, Managing Director, Amara Raja Batteries.

The expansion will make it one of the single largest battery manufacturing plants in Asia, said Mr Gala.

Single point

Unlike other manufacturers, Amara Raja has opted for a single point manufacture and distribution rather than spacing out production across widely located plants.

The company intends covering the retail market with its chain of 130 direct retailers (the company deals directly with the retailers) linked to 15,000 retailers (they report to direct retailers).

The company has opted for the franchisee retail distribution network unlike its competitors.

The company could opt for this retail strategy owing to an inherent product advantage the company enjoys: Amara Raja batteries are factory charged, thus easy and ready to install, and occupies less shelf space.

Others sell the dry charge batteries to retailers who pack the acid before sales.

Retail points

It has led to sales from novel retail points such as Sriram group's `Hariyali Bazaar' rural shopping mall and e-choupal rural marketing initiatives.

Hike in production capacity will match demand from an ever growing vehicle market, while exports are likely to remain the same (25 per cent of total sales).

The company intends tapping the two-wheeler battery market, though Mr Gala said the company shall enter as and when it has the leading technology backed by novel retail strategies.

More Stories on : New Projects | Retailing | Andhra Pradesh | Automobile Components

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