To invest Rs 25 cr, production to start by August

Deepak Goel

New Delhi, May 4

Lighting company Surya Roshni Ltd is setting up a compact fluorescent lamp (CFL) manufacturing plant with an investment of around Rs 25 crore. The facility would come up at the company's existing bulb and tube-light manufacturing facility at Malanpur (Madhya Pradesh). "The assembly lines would be set up next month and production would start by August," said Mr Sharad Agarwal, Executive Director, Surya Roshni.

The total production capacity of the unit would be about 20-lakh CFLs per month. "But initially the facility would produce about two-lakh CFLs per month and add one lakh every month until the total output target of 20-lakh CFLs is reached," he said.

Manufacturing units

The company's two manufacturing units at Malanpur and Kashipur (Uttaranchal) have a combined capacity to produce 142-lakh ordinary bulbs and 46-lakh tube-lights per month. On the choice of the new facility, Mr Agarwal said that the soon to be laid gas pipeline by GAIL near Malanpur would result in input cost benefit.

The market

According to an estimate, the total CFL market in the country stands at about one crore units per month, with a growth rate of 30-40 per cent per annum. The ordinary bulb market comprises around four crore units per month, with a growth rate of 8-10 per cent.

"Even if its growth rate for CFLs is much higher than that of the ordinary electric bulb, the market for the latter would continue to grow, given the fact that around 65 per cent of the country's population resides in villages and the huge cost differential between an ordinary electric bulb and a CFL,'' said Mr Agarwal.

The company plans to price its CFL product competitively and targets a 10 per cent market share in the organised sector in the next two years.

It also plans to expand its retailer network to four-lakh in around 18 months from the existing three lakh retailers.

(This article was published in the Business Line print edition dated May 5, 2006)
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