 "Godrej Appliances expects 60% business from premium products")
Godrej Appliances, part of $3.3 billion Godrej & Boyce Mfg Co Ltd, is expecting a major share of its business to come from mass premium products, which are value added products in the mass category. The company is planning to spend around Rs 130 crore into R&D this year up by around Rs 30 crore last years' spent, said Kamal Nandi, business head and executive vice president, Godrej Appliances.
The company is currently focusing on the premium products and has lined up several premium products in the categories which we are strong in, said Nandi. At present of the total revenue 80% contributed by mass product, while the rest is from premium.
The ratio will change over the next 2-3 years and the company would see around 60% of its revenue coming from the mass premium segment, which are additions to the mass segment products and offer various benefits to the customer including energy efficiency, he added.
"Next one year, the launch will be happening in the premium products only for us," he said. The company would launch various products including the higher end refrigerators with higher capacity, including the side-by-side and bottom-on model, from September, this year.
At present, almost 40% of the ACs and 27% of the refrigerators are in the mass premium segment. The offering in the mass premium segment would be such as higher energy efficiency which offer the buyer to retrieve the premium spend on the product within a year of purchase, and similar value addition. For instance, the company's six star Air Conditioner, which is more energy efficient than the standard five star refrigerator, is sold at 10% premium price, though the buyer would be able to retrieve in a years' time.
The company spends around five% of the total turnover on R&D and another five% on advertisement. Last year, when the turnover was around Rs 2,100 crore, the R&D spend was around Rs 100 crore and considering the company expects a 30% growth this year, it is expected to see around Rs 130 crore spend on R&D, he added.
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Vaccine Cooler
Godrej Appliances is expected to send out its first consignments of Vaccine Cooler to customers from July, this year, said Nandi. The company has developed a vaccine cooler, to store the vaccines in the prescribed temperature of 2-8 degree celicius, for the government and the industry in the country.
The product has been developed with technology tie up with UK-based The Sure Chill Company Ltd, according to which the company would develop and manufacture the cooler to supply in India and some of the overseas nations. The company has also set up a facility with a capacity to manfucture 10,000-15,000 units of a range of 50 litre to 100 litre coolers. The company is expecting that the government departments and retailers who currently lacks proper storage facility for vaccines would opt for the cooler.