Haier sees India as production hub

India is set to emerge as the manufacturing hub for Chinese consumer durables maker Haier's exports to the neighbouring markets and African region.

Logistically, it makes sense to make India the production base for this region and Africa, according to Eric Braganza, president, Haier Appliances (India). The company would initially export refrigerators and washing machines, most of which would be produced in India.

"Over the next two years, about 25 per cent revenue of Indian operations would come from exports," he added.

With the Buoyant demand in the domestic market and increasing exports, the company would need to set up a second manufacturing plant in about three years from now, said Braganza.

It would be based in the northern part of India. Before that, the company would expand its production facility at Ranjangaon near Pune by 2014, where it produces refrigerators and few models of washing machines at present.

Haier India, which is a wholly-owned subsidiary of the $20-billion Chinese parent, intends to produce almost all its models across categories in India, including air-conditioning machines and water heaters, going forward, said Braganza. It currently imports all TV panels and water heaters from China.

Quantum of investments for the capacity augmentation at Ranjangaon and the second facility is yet to be firmed up, he added. The company has so far invested about Rs 120 crore at the Ranjangaon factory.
Haier targets revenue at Rs 1,250 crore (Rs 12.5 billion) in 2012, and Rs 1,600 crore (Rs 16 billion) in 2013 from Indian market, said Braganza. In 2011, the company had a turnover of more than Rs 970 crore (Rs 9.7 billion).

At present, the Ranjangaon facility has an installed capacity of 10 lakh units of refrigerators annually, which will be ramped up to 20 lakh (2 million) units in the next two years at an investment of about Rs 40 crore (Rs 400 million), he added.

This year, Haier will produce 650,000 units of refrigerators.

In 2012, the company targets to sell about 480,000 units of refrigerators, 200,000 washing machines, 250,000 TVs, 60,000 ACs and 55,000 water heaters in India.

Haier India currently has 170 exclusive stores, apart from being retailed from 4,500 multi-brand outlets. It is increasing this to 250 exclusive outlets and 6,000 other outlets by 2013. It employs 1,300 people.

Haier, which positions itself as the mid-market brand in India, claims a 12 per cent market share in the deep freeze category, followed by 6 per cent in refrigerator, 4-5 per cent in washing machines and about 3 per cent in the air-conditioning market in India. "We aim to have a three-fold market share within the next three years," Braganza said.