Wire-maker Polycab to enter home appliances segment; withdraws investment from IPL

Purvita Chatterjee Mumbai | Updated on January 20, 2018 Published on April 25, 2016

Plans ₹1,200 crore capex for next three years

Wire and cable company Polycab is planning to enter the home appliances category with products such as mixer grinders and irons. The Mumbai-based company with a dominant position in the household cables segment has been steadily increasing its presence in consumer durables having entered categories such as fans, lighting and water heaters in the past two years.

“We have assigned a capex of ₹1,200 crore for the next three years which includes setting up a manufacturing base for fans in Uttarakhand. Kitchen appliances like irons and mixer grinders will now get added to the consumer durable portfolio which we have been building for the past two years and expect the category to contribute 15 per cent of our turnover in the next four years,’’ said R Ramakrishnan, Joint MD and Group CEO.

Competing with big companies like Crompton Greaves (the market leader in fans), Usha and Havells in the fans category, Polycab would be riding on its existing distribution base for cables and lightings to vend its new categories.

“There are synergies with the cable business since the same electrician network can be used to sell new categories like fans and electric water heaters. We already have 3,000 direct dealers reaching out to one lakh outlets and this network is slowly being expanded as we enter new categories,’’ added Ramakrishnan.

Unlike the rest of its products, kitchen appliances would have manufacturing outsourced to third party players.

The cable and wire company, in which World Bank body IFC has a 15 per cent stake, has been investing behind fresh campaigns every summer with the baseline ‘Connection Zindagi Ka’. This summer it had decided to invest in IPL for the first time but withdrew its decision subsequently. “Polycab had decided to buy television spots for the first time since fans sell during summer and IPL was the ideal platform. But now we have decided against it as media budgets are not substantial and clutter on this property would not help us,’’ said Ramakrishnan.

Polycab has developed a range of premium fans this summer and was planning to communicate the same through fresh campaigns on IPL.

Currently it is not using e-commerce as a channel to sell its durables range, but in future it would consider developing certain products which can be sold through this route. “We would develop alternate products for our internet-based strategy which would have a separate value proposition from our regular products,’’ added Ramakrishnan.

Published on April 25, 2016
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