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Birla firm to sell De' Longhi appliances

India's unlisted Birla Electricals Ltd has signed an agreement with Italy's De' Longhi SpA to sell a range of the Italian firm's small home appliances, a Birla official said on Wednesday.

"With this joint venture we bring to India an entire gamut of home appliances of European standards," Yash Birla, chairman of Birla Electricals, said in a statement.

De' Longhi is a leading maker of small home appliances in Italy. Birla Electricals, a part of the Yash Birla group, markets power generators made by group firm Birla Yamaha Ltd in the domestic and international market.

The agreement allows Birla to import and sell a range of products including toasters, blenders, cooking ranges, chimneys, ovens and heaters in India.

Some products, such as juicers and mixers, that have been developed largely for the Indian market will be sold under the Birla-De' Longhi brand, officials said.

Stefano Godio, export manager for the De' Longhi group, said the company hoped to expand the marketing arrangement with Birla into an equity partnership by the end of 2002 when it expects to begin assembling some appliances in India.

The Italian firm, which has 15 manufacturing plants and a presence in over 50 countries, could also begin manufacturing appliances in India by 2004 if the response to its products is good, he said.

Officials at Birla Electricals estimated the size of the Indian small home appliances market at about Rs 15.0 billion a year and growing at 15-20 per cent annually.

Nearly 70 per cent of the country's home appliances market is made up of small firms in the unorganised sector.

Company officials said they expected the slightly higher priced but premium quality De' Longhi products to create a niche for themselves.

Officials said Birla Electricals expected to notch up sales of Rs 70 million in the current year to next March, Rs 200 million in the next year and Rs 320 million in 2003-04 from the sale of home appliances.

The De' Longhi brand in India will compete with Philips India, the local unit of the Dutch firm; Usha International Ltd; Bajaj Electricals Ltd and Maharaja.

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