Godrej Appliances, which is moving towards premiumisation, is looking at a 20 per cent growth in business in 2017-18 despite disruption in demand trend on account of implementation of Goods and Services Tax and rising raw material costs.
“Last few months have been quite turbulent for the appliance industry and it is only now that things are starting to settle. We had a good growth of 18-20 per cent in the festive season and are on course to meet the target for the year,” said company’s Business Head and Executive Vice President Kamal Nandi.
In a bid to increase the firm’s production capacity in the premium range, the company earmarked an investment of Rs 200 crore towards a new manufacturing capacity in Pune.
The new plant is expected to come on stream by the end of 2019 or early 2020 and would produce high capacity refrigerators, chest and medical refrigerators and washing machines.
“The contribution of premium products to the company’s business is expected to increase from 15 per cent at present to 25 per cent over the next three years,” Nandi said.
According to him, the company is eyeing a total business of Rs 4,000 crore this year and about 55 per cent of the company’s business comes from sale of refrigerators.
“There has been a rise in the price of raw materials. MDI (a chemical used to make foam) prices have shot up significantly in the last three-four months, pushing up the cost of refrigerators. There is also increase in steel prices,” Nandi said on the sidelines of a launch of a new refrigerator range.