Havells to double CFL capacity

Electrical product-maker Havells India will double the capacity of its compact fluorescent light (CFL) plant in Neemrana in Rajasthan to 8 million pieces this year, said director of finance Rajesh Gupta.

“We will spend about Rs 30 crore on the expansion,” said Gupta.
Most of the CFLs produced are exported to Sylvania, which Havells acquired for $200 million in 2007.

“Last year, of the 32 lakh pieces of CFL we manufactured, we exported 20 lakh to Sylvania and the rest we sold in India,” Gupta said.

He said though growth in Europe would remain muted, the US’s prospects were much better. Havells had earlier two CFL plants, one in Faridabad and the other in Haridwar. But over a year back, the company shifted production from both the plants to a new facility in Neemrana.

Havells is also planning to up the capacity of its fan facility in Haridwar from 48 lakh fans an annum to 60 lakh at a cost of Rs 20 crore. The existing facility is only for ceiling fans and Havells currently imports table and pedestal fans from China.

“But after the capacity expansion, we will be able to make them ourselves,” Gupta said.

Havells will also spend about Rs 60 crore on both operational expenses and to create additional space at its other plants for future requirements, Gupta said. Last fiscal the company had spent Rs 185 crore.

Asked how the company would fund its Rs 100 crore capex, Gupta said, “We are expecting internal accruals of Rs 350 crore so there will be no issues.” For the year ended March 31, Havells reported a 12.5 % jump in its topline to Rs 2,474 crore and a 56.4% increase in its net profit to Rs 227 crore over the previous fiscal.