Joint Venture Company to be established to tap India’s growing consumer durables market
Delhi (India), May 23, 2017 Voltas Limited — A Tata Enterprise, and Ardutch B.V. (a subsidiary of Arçelik A.S.; part of the Koç Group – Turkey’s largest industrial and services group), have agreed to establish a Joint Venture Company (JVC) in India, to enter the consumer durables market in the country. The new company to be incorporated in India will be an equal partnership joint venture. The proposed JVC will leverage the strong brand presence and wide sales and distribution network of Voltas, which is the market leader for residential air-conditioners in India, with over 20% market share. Arçelik will bring to the JVC its strong R&D and manufacturing prowess, in addition to a wide product range and global sourcing capabilities. Beko, the global brand of Arçelik A.Ş., has been the fastest growing home appliances brand of Europe for the past 7 years. The brand is the market leader in UK and the #1 freestanding white goods brand of Europe. The complementary strengths of the two partners will help build a sustainable consumer durables business in India.
The proposed JVC will launch refrigerators, washing machines, microwaves and other white goods / domestic appliances in India. A manufacturing facility will be set up in the country, and the JVC will also source products from Arçelik’s global manufacturing facilities and vendor base. The Consumer Durables market in India is slated to grow by 10%-12% per annum and reach US$ 12 billion by 2027. The JVC will have an equity capital of USD 100 million, and Tata Investment Corporation Limited (TICL) and Koç Holding (KOÇ) will also hold 1% equity stake each, in the new Joint Venture.
Commenting on the Joint Venture, Fatih Kemal Ebiçlioğlu, President of Consumer Durables Group of Koç Holding, said “Given the accelerating shift of global economic power to Asia, this joint venture will be a critical step for Beko’s growth in the region. India stands out as an important opportunity window as it offers a great potential with its 1.3 billion population. In the last ten years alone, the Indian major domestic appliances market grew by nearly 9 percent, surpassing the overall 3 percent growth of global white goods market. With this joint venture, we make a strategic move to increase our global competitive advantage.”
Hakan Bulgurlu, CEO of Arçelik, said: “Our joint venture with Voltas and Tata Group demonstrates Beko’s commitment to India and showcases Beko’s “Silk Road” strategy, which seeks to capitalize on major growth opportunities in countries across the Asia Pacific.”
“India’s rapidly expanding new middle class presents a major opportunity for our business. This young, urbanizing population includes many first-time buyers investing in white goods. The potential for growth in this market is incredibly exciting and we are proud to be partnering with the Tata Group, to deliver this ambitious new partnership.”
“By combining our global manufacturing expertise and innovation capabilities with Voltas’ expertise, we’re confident the company will deliver economic growth and act as a platform for our continued business success going forward.”
Ishaat Hussain, Tata Sons Director and Chairman of Voltas Ltd, said, “Consumer Durables is a logical extension for Voltas, and we are delighted to be forming this Joint Venture with Arçelik, part of the Koç Group. The strong technology platform, combined with the global manufacturing and sourcing capabilities of Arçelik, will help the JVC offer many unique and differentiated products to the Indian market. The Voltas-Beko partnership will also leverage the well-known brand and distribution strengths of Voltas, and we will work towards establishing the joint venture as a market leader for consumer durables in India”
Sanjay Johri, Managing Director of Voltas Ltd, said, “Our long history, and our unique understanding of Indian customers combined with our brand and distribution strengths, has helped us become market leaders in room air-conditioners in India. Voltas’ core competence, and the manufacturing capabilities and wide product range of Arcelik, will help us become a leading player in the consumer durables market in the country. The Indian consumer has always been at the forefront of all our plans, and the expansion in our product portfolio, through this foray, will as always, provide our customers products ‘made for India’, which specifically cater to their needs. We remain committed to our goals of sustainable profitable growth, and this Joint Venture will create enhanced value for our customers and shareholders.”
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