Bajaj Electricals open to buying Videocon’s Kenstar brand

Purvita Chatterjee Mumbai | Updated on January 12, 2018 Published on June 07, 2017

Shekhar Bajaj, CMD

Will look to fill the gap in the home appliances category

Mumbai-based Bajaj Electricals is open to acquiring distressed companies and brands, including Kenstar, from the debt-ridden Videocon Industries. The domestic appliances major has been trying to buy brands like Polar, Sumeet and even Beko (which recently forged a joint venture with Voltas) in the past.

Shekhar Bajaj, Chairman and Managing Director, Bajaj Electricals, told BusinessLine, “Kenstar was created by Videocon to be like the international brand of Kenwood. I am ready to buy it if it were offered since I am interested in acquiring brands and already have a strong distribution.’’

Bajaj Group’s association with Videocon goes back to the days when the latter was a distributor for its group company.

“Videocon started its journey as a distributor for Bajaj Auto. There is no budget for us for acquiring brands, since we have cash flows within the group. But at the same time I am only willing to pay for the brand and not for manufacturing or distribution. In the past we have tried to buy brands like Sumeet and Beko. If Videocon comes to us for help with Kenstar, we will be open to it,’’ he added.

Premium brand

Kenstar is a 25-year-old premium brand created by Videocon Industries with categories like air-coolers and food processors, where Bajaj also has its own brand, which is more mass in its pricing.

There have been indications that Videocon may put it up for sale to reduce its huge debt levels. However, when contacted, Rajiv Kenue, COO, Kenstar, said, “There are no plans to sell Kenstar. In fact, today we have a 28 per cent share in air-coolers segment and want to equal the market leader Symphony’s share at 33 per cent in the next two years.’’

While it has created a premium brand like Bajaj Platini, acquiring Kenstar may help Bajaj fill the gap at the top end of the home appliance category for products ranging from irons to water heaters.

“ Kenstar is strong in air coolers and we are also in the same category. We need a brand which we can expand,’’ added Bajaj.

In the past, Bajaj had picked up a 60 per cent stake in Nashik-based Starlight Lighting, the makers of CFL lamps.

Sourcing from China

Despite having factories for manufacturing fans and LED lamps, Bajaj Electricals has been outsourcing its 21 different product categories, with China being a major supplier with ₹300 crore worth of appliances.

Taking the Bajaj brand to the overseas markets more aggressively is also on the cards for which it is scouting for a distribution partner. “We want to piggyback our brand on overseas companies since creating a brand in countries like Europe is not possible,’’ said Bajaj.

In the past, Bajaj Electricals had forged a joint venture with international companies like Black & Decker which has now ended and currently it has a distribution arrangement with the UK-based Morphy Richards brand for which it has created a separate distribution channel.

Targeting better margins after deleting the wholesale channel and directly dealing with its 200-odd distributors, Bajaj Electricals is looking at a 10 per cent growth in its top line to reach a turnover of ₹5,000 crore this fiscal, across its EPC(engineering, procurement and construction) and consumer products businesses.

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Published on June 07, 2017
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