Sanyo-BPL to start output this week

The first television sets produced by the Rs 360-crore Sanyo-BPL, the newly formed joint venture between BPL and Japan's Sanyo Electric, will roll off the assembly line in the company's only production facility at Bangalore this week, company sources said.

The factory, expected to employ 460 workers, will produce 60,000 televisions a month for the first year and is expected to provide a fillip to BPL's other production-facilities in the country.

"Most of BPL's other plants are engaged in manufacture of critical components for consumer electronics and appliance industry, such as picture-tubes, circuit boards, tuners, speakers, non-CFC compressors and motors. These plants will supply to both the JV as well as to various other companies in the Industry that have been buying components from BPL all along," said a company executive today.

In an agreement signed earlier this month, Sanyo had finally approved the joint-venture agreement transferring BPL's entire colour TV production and marketing facilities to a new entity Sanyo-BPL Ltd.. with 50 per cent stake for each partners.

The deal was seen as a much-needed break for BPL which has seen its market-share in the consumer durables market go from around 7 per cent last year to virtually nothing during this calendar year.

According to the highly placed executives, the JV is not planning any immediate capacity addition outside of the Bangalore plant. Sanyo will limit its investment in the JV to paying off BPL for the 50 per cent stake in the existing infrastructure valued at Rs 360 crore.

BPL had been keen for Sanyo to bring in more funds, which if done, would have doubled the total investment in the JV.

"All the investments made by the two partners SANYO and BPL have been towards purchase of the plant, the sales & service infrastructure, logistics network and the rights to make BPL televisions from BPL Limited," the executives officials ointed out.

BPL, once a household name in TV, audio and home appliances, said the disposal of its colour TV business would not affect its plans for the other durables.

"We will wait and watch as to whether we should [re]enter the home appliances business since most of the [Indian] companies are losing large amounts of money in the business," said executives.

It would also confine its presence in the audio-market to its present arrangement with Worldspace corporation to manufacture satellite radios for the Indian market. In addition to these plants, BPL has a mould making facility that caters largely to the automotive industry, an alkaline battery plant for battery exports and a medical electronics facility that produces portable heart care devices.

BPL Limited's share price remained more or less stable at around Rs 37.80.