Kohler to invest $200m for facility in Gujarat

Kitchen and bathroom products major Kohler planns to invest $200 million (about Rs 950 crore) to set up a greenfield plant in Gujarat.

The US-based, $5 billion Kohler Group will use the plant to cater to the India market as well as to serve as a global exports base.

Derric Tay, president-Asia Pacific, Kohler, said that the company will manufacture in India its toilets and faucets range, to be sold locally as well as for exports to the US and the European markets.

Tay said, the company had acquired 250 acres of land at the Jagadia Industrial Estate near Vadodara in Gujarat, where the construction of the first phase will be started soon.

"We will commission the first phase within a period of 18-20 months," Tay said, adding that the company will distribute in India, products imported from its plants in Thailand and China.

Additionally, the company will also bring in some ultra-luxury products from its manufacturing base in Australia and the US, he said.

Neither did he comment on the capacities planned at the facility, nor did he disclose the duration by which the entire $200 million will be invested. "We will build enough capacities to serve the Indian market as well as support overseas markets," is all he said.

Kohler India Corporation vice-president and commercial director Sharad Mathur said, at the India facility the company will make its large volume products like toilets, basins and faucets.

"The premium and exclusive variety will continue to be imported as we don't see enough volumes here," he added.

Mathur explained that the Indian market is expanding at a very high rate as the real estate sector as well as the hospitality sector is booming.

"The current market size for branded vitreous China products is Rs 750 crore and is growing at 17-20 per cent to touch Rs 900 crore the year 2006, while the market for faucets market, at Rs 1200 crore now, is set to grow 30 per cent," he said.

When asked what part of this market does Kohler want to capture, Mathur said he would like to achieve the leadership position though he could not spell out this position in terms of percentage of the market share. "We will be a dominant player soon enough," he said.

Spelling out the plan for distribution of the company's products, Mathur said 70 dealerships will be opened across India during the year 2006. Mathur said, the company will supply directly to the dealers, eliminating the "distributor" stage.

"Our sales and marketing teams will work closely with the dealers and develop the market and awareness about our range. The transactions will however be routed only through authorised dealers," he elaborated.

The company will soon roll out an exhaustive promotion plan, Mathur said, without disclosing the budget earmarked for the purpose.