An­chor Elec­tri­cals to build ₹200-cr plant in AP

Eyes ac­qui­si­tions to push growth

The Hindu Business Line - - NEWS - KSE­NIA KONDRATIEVA

An­chor Elec­tri­cals, a whol­ly­owned sub­sidiary of Ja­pan’s Pana­sonic Cor­po­ra­tion, is plan­ning to set up a 30-acre fac­tory in Sri City, an in­te­grated busi­ness city in Andhra Pradesh around 50 km north of Chen­nai.

The fa­cil­ity in which the com­pany will in­vest around ₹200 crore will mainly pro­duce fans, wiring de­vices and switchgear and will cater to Cen­tral and South In­dian mar­kets, Vivek Sharma, Man­ag­ing Di­rec­tor, told Busi­nessLine.

He added that the plant will start op­er­a­tions in 2020, gen­er­at­ing up to 2,000 new jobs, out of which 70 per cent are most likely to be re­served for women. Cur­rently, the com­pany em­ploys 9,000 peo­ple across its of­fices and eight fac­to­ries.

An­chor was ac­quired by Ja­pan’s Pana­sonic Cor­po­ra­tion over a pe­riod of three years from 2007 to 2010.

Ac­cord­ing to Sharma, who spent over three decades in con­sumer elec­tron­ics sec­tor be­fore join­ing the com­pany in Au­gust 2017, An­chor Elec­tri­cals has, for the first time, grown by 28 per cent to ₹2,980 crore in 2018 fis­cal. Ear­lier, it used to grow at a com­pound an­nual growth rate (CAGR) of 13 per cent. The com­pany has also dou­bled its profit to ₹470 crore.

Af­ter Sharma took over as the Man­ag­ing Di­rec­tor, he has re­struc­tured An­chor’s sales team and prod­uct port­fo­lio. The fo­cus, he said, is to grow the com­pany’s foot­print in seg­ments such as light­ing, fans and wires where An­chor cur­rently has just 3 per cent mar­ket share.

In the switchgear busi­ness, An­chor en­joys a 36 per cent share, how­ever, the to­tal size of the mar­ket is es­ti­mated at ₹4,000 crore, Sharma ex­plained.

“It’s a very small bas­ket. Ca­bles is four times of that, or if you look at light­ing mar­ket, its po­ten­tial is ₹30,000 crore,” Sharma said.

Dou­ble-digit growth

As An­chor is eye­ing over 20 per cent CAGR growth over next five years, ac­qui­si­tions could be one of the growth drivers. “Fur­ther ac­qui­si­tions are pos­si­ble, and there are two or three big ac­qui­si­tions that we are con­sid­er­ing right now, in fans and switchgear cat­e­gories. But you can­not de­pend on sus­tain­able con­sis­tent long-term growth by bet­ting on ac­qui­si­tions,” Sharma said.

The com­pany name, too, is likely to un­dergo changes in the com­ing months with An­chor likely to be changed to Pana­sonic, Sharma hinted, al­though both brands will con­tinue to be used in the mar­ket as each of them caters to dif­fer­ent cus­tomers.

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