Voltas Limited, a Tata Enterprise, and Ardutch BV, a subsidiary of Arcelik AS (part of the Koc Group - Turkey’s largest industrial and services group), have agreed to establish a joint venture company (JVC) in India, to enter the consumer durables market in the country.
The new company will be an equal partnership joint venture. The proposed JVC will leverage the strong brand presence and wide sales and distribution network of Voltas, which is the market leader for residential air-conditioners in India, with over 20 percent marketshare. Arcelik will bring to the JVC its strong R&D and manufacturing prowess, in addition to a wide product range and global sourcing capabilities. Beko, the global brand of Arcelik, has been the fastest growing home appliances brand of Europe for the past 7 years. The complementary strengths of the two partners will help build a sustainable consumer durables business in India.
Sanjay Johri, managing director of Voltas Ltd, said, “Our long history, and our unique understanding of Indian customers combined with our brand and distribution strengths, has helped us become market leaders in room air-conditioners in India. Voltas’ core competence, and the manufacturing capabilities and wide product range of Arcelik, will help us become a leading player in the consumer durables market in the country. The Indian consumer has always been at the forefront of all our plans, and the expansion in our product portfolio, through this foray, will as always, provide our customers products ‘made for India’, which specifically cater to their needs.”
The proposed JVC will launch refrigerators, washing machines, microwaves and other white goods & domestic appliances in India. A manufacturing facility will be set up in the country, and the JVC will also source products from Arcelik’s global manufacturing facilities and vendor base.
The consumer durables market in India is slated to grow by 10-12 percent per annum and reach $ 12 billion by 2027. The JVC will have an equity capital of $ 100 million, and Tata Investment Corporation Limited (TICL) and Koc Holding (KOC) will also hold 1 percent equity stake each, in the new joint venture.
Commenting on the Joint Venture, Fatih Kemal Ebiclioglu, President of Consumer Durables Group of Koc Holding, said “Given the accelerating shift of global economic power to Asia, this joint venture will be a critical step for Beko’s growth in the region. India stands out as an important opportunity window as it offers a great potential with its 1.3 billion population. In the last ten years alone, the Indian major domestic appliances market grew by nearly 9 percent, surpassing the overall 3 percent growth of global white goods market. With this joint venture, we make a strategic move to increase our global competitive advantage.”
Hakan Bulgurlu, CEO of Arcelik, added, “India’s rapidly expanding new middle class presents a major opportunity for our business. This young, urbanising population includes many first-time buyers investing in white goods. The potential for growth in this market is incredibly exciting and we are proud to be partnering with the Tata Group, to deliver this ambitious new partnership.”
