Companies

Panasonic Life Solutions gains ground over rivals on demand revival for its products

Abhishek Law Kolkata | Updated on August 29, 2020

‘Good relations with vendors, price rise in copper wires saw demand recovering faster in urban, upcountry markets’

The ₹3,400-crore Panasonic Life Solutions India (formerly Anchor Electricals), a fully-owned subsidiary of Japanese giant Panasonic Corporation, is witnessing a revival in demand for offerings like electrical switches, switch-gears, wires and cables, among others.

Demand recovery has come with the company gaining ground over rivals, whose supply chains remain disrupted because of the pandemic or cash flow issues.

A price rise for copper wires in international markets over the last two-to-three months has led to a corresponding increase in bookings by the trade here in India. Typically, price rise and demand for copper wires are directly proportional, that is, demand rises when prices remain low.

According to Vivek Sharma, MD, Panasonic Life Solutions India Ltd, a re-worked business plan has ensured minimal supply chain disruptions. This included paying vendors in advance and ensuring cash flow support for them during the lockdown days and post Unlocking.

Similarly, the closure of copper mines in Latin American nations like Brazil, Chile and Argentina led to supply shortages, and a price rise of between 15 and 18 per cent.

“Certain factors like maintaining good relations with vendors and a price rise in copper wires saw faster demand recovery for us in both urban and upcountry markets,” he told BusinessLine.

Nearly, 85 per cent of the company’s businesses in the country are driven by the B2C segment.

Higher sales

According to Sharma, there was no production or sales in April. However, demand recovery began post ‘Unlocking’ in May and sales teams were able to achieve 80 per cent of their targets that month.

Subsequently, in June and July the company saw 11 per cent and 15 per cent growth in sales respectively, on year-on-year basis.

“We have grown higher than last year’s sales for June and July. A similar trend is visible for August too. So, it would be safe for us to say demand is now higher than pre-Covid-19 levels. If this trend continues, we will definitely make up for April’s lost sales by September-end,” he said.

For the full fiscal, Panasonic Life Solutions India is expecting 15 per cent growth in turnover to approximately ₹4,000 crore.

Investments

In fact, Panasonic Life Solutions India now sees an opportunity in the country for obtaining greater market share. It is not shying away from investments either.

Nearly ₹60 crore has been spent on the launch of ‘Ziva’ branded modular switches targeting the B2C segment, particularly the “affordable home buyer”. Offerings are priced substantially lower than regular competition.

The company is also investing close to ₹600 crore for its upcoming facility at Sri City in Andhra Pradesh. This will be its eighth facility in India. The unit will also aim at shoring up exports to 10 per cent, up from the current 2.5-3 per cent levels (of turnover) in the next five years. Exports are being targeted to the West Asian markets, African nations and Europe.

“Work on the Sri City facility has resumed after the pandemic-induced lockdown and other disruptions. Around ₹250 crore has already been spent towards purchase of land and so on,” Sharma said, adding that investments were being made from internal resources.

Published on August 29, 2020

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