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Bindu D. Menon

New Delhi, April 20 Faced with spiralling input costs and margin pressures, consumer durable companies are looking at using composite alloy in lieu of metals to keep their competitiveness intact. Besides, the volatility in steel prices is forcing durable makers to beef up prices on both home appliances and durables by 4-7 per cent in the coming quarters.

“A sluggish demand notwithstanding, the consumer durables sector is poised to hike prices in the region of 4-7 per cent. With steel prices going up by almost Rs 7,000 a tonne as compared to last year, the industry is feeling the heat,” say industry watchers and analysts.

Though the research and development division of most companies are trying to reduce dependency on steel and copper by developing composite alloys, it would still be long before these alloys can have commercial applications, they said.

“Steel prices have been highly volatile and this is impacting the input cost. A composite material would help check margin erosion. We are working on developing products to lessen dependency on metals,” said Mr George Menzes, COO, Godrej and Boyce.

Echoing the trend, Mr Sanjeev Wadhwa, Vice-President (Sales and Marketing), Fedder Lloyd India, said, “It is true that all companies are working to develop certain alloys which can replace pricey metals. However, it has to be tested under various conditions and places like in the coastal regions before it can be commercially used. We are looking at a price hike in the 5-7 per cent bracket.”

According to Consumer Electronic and Appliances Manufacturers Association (CEAMA) Secretary General, Mr Suresh Khanna, “The industry has been sluggish since the beginning of the year. Manufacturers are being burdened by input costs. In order to remain competitive they are also making changes in designs to consume less of metal. Washing machines, for instance, have replaced metal tubs with plastic tubs and metal trays in refrigerators are being replaced with glass.”

Haier India too has replaced metal shelves with glass panels in their refrigerators. Mr Pranay Dhabhai, COO and Whole Time Director, Haier Appliances India, said the company was among the first to move to glass shelves, thereby reducing the use of steel and copper.

Samsung India, LG and Whirlpool too, are looking to hike prices by two to three per cent. For most companies, the price hike will be the maximum in air conditioners, microwaves and refrigerators as these products have the highest consumptions of metals”.

“We will see the impact and see if a price correction is needed during the current quarter. We have absorbed as much as possible, but some price hike will necessarily have to be passed on to the consumer,” said Mr Ravinder Zutshi, Deputy Managing Director Samsung India. He added that the use of composite alloys may take longer to implement.

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