Sunil Mittal, Chairman of Bharti Airtel, is venturing into the consumer electronics industry. Bharti Enterprises, headed by Mittal, and the American private equity investment and management consulting firm Warburg Pincus will jointly buy a 49% stake in Haier Appliances India, which is an Indian subsidiary of the Chinese electronics conglomerate Haier Group. Although the acquisition amount has not been disclosed officially, it is estimated to be around 2 billion USD (or around 18,000 crore INR).
Haier Group will hold the remaining 49% stake in Haier India. Bharti Enterprises and Warburg Pincus said that their investment is strategic. The remaining 2% stake in the company will be owned by the management of Haier India. The new investors will get representation in the board of directors of the company. The daily operations of the company will continue to be handled by the management.
Establishment of New Manufacturing Plant in South India
- Haier India has been present in the market since 2004 with their offerings present in more than 6,500 retail stores in the country. Haier also plans to establish a new production unit in southern India. The production unit would manufacture electronics that would be used in the domestic market as well as for export purposes. Haier would be investing ₹3,500 crores in the production unit by 2030.
- This is pegged on projections that India’s local market for electronics and appliances is expected to reach ₹2 lakh crores by 2030, doubling from what it is now. Haier India is reported to be posting an average growth of 25% every year for seven consecutive years. Also, it enjoys 21% market share in its domestic side-by-side door refrigerator segment.
Positioning Within the Existing Market Competition
- It caters to consumer durables like air conditioners, refrigerators, LEDs, washing machines, and kitchens. Haier India plans to make further investments in manufacturing their electronics products. These new investments will improve Haier India’s manufacturing capability.
- Bharti Enterprises and Warburg Pincus stated in a statement that the collaboration would help in furthering manufacturing in India in a way that meets local demands. They also stated that with Haier’s worldwide knowledge of innovation in product manufacturing and Bharti’s connections in India, as well as Warburg Pincus’s knowledge of associating brands with consumers, they would enhance Haier India’s presence in the expanding market of durable consumer goods.
Tags Cloud
