The Bijon Nag-controlled IFB Industries' efforts to sell of its white goods business is stuck, with some of the foreign majors adopting a wait-and-watch approach due to the current political imbroglio in the country.
The Rs 500-crore IFB Group, which has been scouting for a buyer for its home appliances business, has been in negotiations with Arcelik of Turkey.
IFB had asked for a price of Rs 200 crore and was expecting to firm up a deal by April 1998 and focus on its new aircon venture with Fujitsu.
The deal now seems unlikely to happen by April and may drag on for some time till an industrial policy outline takes shape. Earlier, crucial rounds of discussions between Arcelik and IFB failed to make any headway mainly on the issue of price.
The price so far offered to IFB is believed to be in the region of Rs 125 crore.
IFB's home appliances division has been valued by global consultants Ernst & Young, and the asking price of Rs 200 crore is based on that assessment. The competition in the white goods market in the country has undergone a change with entry of Korean majors like Samsung and LG Electronics.
The Koreans recently entered the microwave oven market and have already started garnering impressive market share in the high-end washing machines -- two of IFB's strongholds.
They also have plans to launch low-priced washing machines later this year.
IFB has so far managed to hold its market share in washing machines against larger and more experienced global players like Electrolux and Whirlpool.
The home appliances business, comprising washing machines, microwave ovens and dish washers, contributes about Rs 140-150 crore in IFB Industries' Rs 300 crore turnover.
The IFB-Fujitsu venture will compete with the two Korean majors for the lucrative aircon market.
IFB currently hardly has any competition in the dish washer market, but will soon face competition from Videocon which is likely to enter this market soon.
Dish washer is a an emerging concept, which, like the washing machine market, is likely to explode in future.
