NIFT UG 2015 Question Paper with solutions

  The fragmented home appliances category is poised for consolidation, with companies looking for acquisitions to strengthen their manufacturing capabilities and expand operations into newer areas. Early this year, the Netherlands based Royal Philips Electronics had acquired Tamil Nadu based Preethi, makers of mixers and grinders. In May, France’s Group SEB bought out the 45 per cent stake of Maharaja Whiteline in order to take full control of the company. Market leader Bajaj Electricals is now scouting for acquisitions to make a mark in the non-electrical kitchen appliance space, while new entrant Borosil is seeking a foothold in manufacturing with the help of smaller companies. “We want to strengthen our position in the nonelectrical kitchen appliance space like pressure cookers, gas stoves and non-stick cookware, for which we are open to acquiring smaller companies in these categories,” says Executive Director, Bajaj Electricals. Earlier, some of these items were reserved for the small scale sector. Bajaj Electricals said it is looking for players who make and brand these products to add them to its roster of kitchen and small appliances. The company continues to sell the largest number of mixer grinders (2.5 million a year) and irons (at 3.5 million) in the country. Bajaj Electricals has a research and development centre in Mumbai, but most of its home appliances are out-sourced to third party players. With a sales turnover of ` 1,500 crore from the home appliance division, Bajaj Electricals has already tapped into the premium end of the category with its imported Morphy Richards brand. The massend comprises its own brand of Bajaj, with appliances ranging from sandwich makers to water heaters. Borosil, which has recently entered the home appliance category, is also eager to acquire smaller players with manufacturing capabilities. Glassware maker Borosil’s foray into home appliances is expected to get a leg-up with potential acquisitions. “We have set aside a budget of ` 150 crore for acquisitions. Since we do not have our own manufacturing facilities, we will look at small companies with manufacturing facilities in categories like tableware and crockery. An acquisition will ensure a position of strength and know-how in the kitchen appliance category,’’ says Managing Director, Borosil Glass Works. Considering that the company already has 14,000 outlets for its glass works, it would use the same for some of its kitchen appliances such as mixer grinders. “Once you start your own manufacturing, it helps in building the kitchen appliance business further,” MD, Borosil Glass Works adds