The Hindu Business Line : Havell's plans to shift some Sylvania production lines to India

Looking ahead
No plans of closing down some of SLI Sylvania's plants abroad.
Plan to launch some of Sylvania's brands in India.
The company is also looking for more acquisitions for various products.

Bangalore March 16 Electrical products' company, Havell's, which acquired German-based SLI Sylvania's lighting business for $300 million, plans to shift some of the production lines to India.

"We plan to prune down some of the production lines of Sylvania's plants abroad and shift them to India," Havell's director for finance, Mr Rajesh Gupta, told Business Line. He however, said there are currently no plans to close down some of the plants of SLI Sylvania abroad. "We are, however, taking a closer look at each of the plants and their manpower," he said. Havell's, which manufactures and supplies low voltage electrical equipment, will also launch some of Sylvania's brands in the country. Havell's has seven manufacturing plants spread across the country. "We also expect increased requirements from India and hence this acquisition would help us to meet that demand," Mr Gupta said.

Mr Gupta said Havell's plans to invest around Rs 100 crore in the next five years as capex. The company is also looking for more acquisitions for various products, he said. Havell's expects its turnover for the current fiscal to be around Rs 2,200 crore with a profit before tax of around Rs 180 crore.

The acquisition is considered the largest ever by an Indian electrical products' company. Mr Gupta said the acquisition would add between $75 million and $100 million to the topline of Havell's Indian operations within three years. The turnover from lighting from its Indian operations is expected to grow to around Rs 350 crore during 2007-08 from around Rs 230 crore - Rs 250 crore during the current fiscal. Mr Gupta said that with this new acquisition, Havell's would become one of the top five electrical lighting companies in the world.

SLI Sylvania's acquisition will, however, exclude its businesses in the US, New Zealand and Australia. Currently, Havell's has a market share of between 10 per cent and 12 per cent in India. This is the second time SLI Sylvania is entering the Indian market. It exited the country in 1990 after the Sylvania & Laxman joint venture was dissolved.

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