NEW DELHI, June 25: Home appliances major Whirlpool of India today said it is putting on hold capital expenditure plans to ramp up manufacturing capacity this financial year due to economic slowdown.
“Business cycle is not very conducive. Right now all our plans for capital expansion for capacity have been deferred. It will come up the moment we see growth returning,” Whirlpool of India Vice President Corporate Affairs & Strategy Asia South Shantanu Das Gupta told.
The company had earlier planned to increase capacity at its three manufacturing plants in Pondicherry, Faridabad and Pune, which have a total capacity of 2.5 million units per annum of refrigerator and washing machines.
Das Gupta, however, said the company would invest about Rs 50-70 crore for refreshing products, products innovations.
“You can’t choke everything (investments), you have to be judicious. Also, some big-ticket items, such as platform change and upgrading some of the manufacturing facilities have already been taken care of last year,” he added.
When asked about growth outlook for the current fiscal, Das Gupta said: “Overall the scenario is bleak in terms of growth. Most categories are declining or static. In value terms, we will see 5-10 per cent growth.”
At present, Whirlpool of India has a market share of 15 per cent in the Indian home appliances segment estimated to be around Rs 11,000 crore.
On the impact of rupee depreciation, he said there was pressure on margins but the company is yet to take a call on increasing product prices.
Consumer durable and home appliance makers have been hit hard by of rupee depreciation against the US Dollar and are finding their margins squeezed. Some of them such as South Korean firm LG and Blue Star have increased prices, while Haier India is planning to do so from July.
Most of the components used in manufacturing appliances are imported and those costs are hitting companies hard. (PTI)
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