WHIRLPOOL INDIA LIMITED

Whirlpool of India Limited (WIL) is an 82.3 per cent subsidiary of Whirlpool Corporation, US, one of the leading global consumer durable players. Whirlpool is among India’s leading home appliances companies. It manufactures and markets refrigerators, washing machines, air-conditioners and microwave ovens. Set up in 1995, Whirlpool India has 2,500 employees, an extensive sales and distribution network, a robust manufacturing and R&D infrastructure. WIL has made substantial investments in India so far.

Whirlpool Corporation is one of the world’s leading manufacturers and marketers of major home appliances, with annual sales of over US$ 12.3 billion, 68,000 employees, 50 manufacturing and technology research centres around the globe. The company manufactures its products in 13 countries and markets them in more than 170 countries under brand names such as Whirlpool, Kitchen Aid, Roper, Estate, Bauknecht, Ignis, Laden, Inglis, Brastemp and Consul.

Major player in the home appliances market

Market share

WIL has a market share of 22.8 per cent in the direct cool segment, 17.5 per cent in the frost-free segment, and 14 per cent in the washer segment.

Factors for success

• Aggressive marketing and promotion
Whirlpool India Ltd. has changed its strategy from being a premium-player to a mass-player. Whirlpool has been concentrating on becoming a brand for the mass-market and hence has introduced its products in all price categories. Whirlpool recently announced an alliance with the Italian appliances company Faber Heatkraft to introduce its range of cooking appliances in the Indian market. The products consisting of hobs, chimneys and cooking ranges will be distributed and sold by Faber through WIL’s dealer network and exclusive outlets.

• Taking quality initiatives
Whirlpool India initiated the Six-Sigma programme in 1999 as a quality initiative to transform the organisation to a globally competitive entity. It has helped the organisation streamline operations, improve quality and eliminate defects by increasing customer satisfaction and enhancing its bottom line. Apart from sales and marketing, Whirlpool has extended the Six-sigma initiative to customer focus.

• Wide product portfolio
Whirlpool has a wide product portfolio ranging from air-conditioners to microwaves. Whirlpool has just launched Whitemagic semi-automatic washing machines, which will boost its market share. The washing machines market has been growing at around 14-16 per cent per annum. Among the washing machines, the semi-automatic segment enjoys the largest market where Whirlpool has a significant presence.

Leveraging the India Advantage

• WIL is incubating both technical and managerial talent in India
• WIL offers shared services in India that will undertake development work for Whirlpool Asia
• WIL runs a technical centre for refrigeration in Pune, and for laundry and kitchen aid appliances at Pondicherry
• WIL runs an Export Oriented Unit (EOU) in Pondicherry to manufacture Kitchen Aid products for overseas markets

Infrastructure

Whirlpool has manufacturing facilities at three locations in India to manufacture refrigerators and washing machines. • Whirlpool has set up a Regional Technology Centre (RTC) at Ranjangaon, Pune, which mainly focuses on India as a major manufacturing centre for the Asia- Pacific Region. Whirlpool’s Pune research lab develops refrigerators and air-conditioners for Asia (including China), and Australia. 40 per cent of Whirlpool’s Pune research lab’s resources are devoted to its core research on global projects.

• Whirlpool has set up design centres at Pondicherry to meet the global business needs of the fabric care and small appliance divisions. Whirlpool is exporting refrigerators and washing machines to South Asia, Asia-Pacific, Latin America and West Asia and is the largest exporter of home appliances from India. The manufacturing unit at Pondicherry exports small kitchen appliances under the ‘Kitchen Aid’ brand to the US market. Products under the brand include coffee making machines, coffee grinders and portable ovens.

Future plans

WIL’s future plans are to grow its existing market, continue with its operational and marketing initiatives, continue to innovate, expand its product portfolio and start manufacturing everything in India. WIL plans to make India its biggest manufacturing base in Asia.

Performance of the Company (09-10)

During the year ended March 31, 2010 the sales of the Company, was Rs.2,680 Crores, up by 28%. Profit before tax and extra ordinary items was Rs. 216.61 Crores as compared to corresponding profit of Rs. 95.63 Crores in the previous year.

The performance of the Company during the year surpassed all its previous milestones of turnover, profit, cash generation, working capital and inventory management. This performance has been achieved by focusing on: • New product launches, • Product mix, • Management, • Effective working capital management and • Cost effective initiatives.

|Particulars |March 31, 2010(Rs. in crores) |March 31, 2009(Rs. in crores) |
|Sales/ Income from operation |2,680.30 |2,094.63 |
|Other income |23.38 |11.15 |
|Profit before interest, depreciation, |264.56 |151.95 |
|extraordinary items and tax | | |
|Interest |8.27 |17.32 |
|Depreciation |39.68 |39.01 |
|Profit before extraordinary items and tax |216.61 |95.63 |
|Net profit for the year |145.02 |70.52 |

Sales & Marketing strategies

The Sales and Marketing approach in 2009-10 was adjusted to changes as they occurred in the external environment. The year started on a cautious note as the gloom of recession was still hovering over the country. The emphasis during this period was on cash and profitability rather than growth, and the focus was on selling a better mix, control on receivables and inventory. Marketing investment during this period was prudent and in line with market growth. However, as the end of the first quarter approached, it was evident that the government’s fiscal stimulus was having a positive impact on business and consumer sentiment, signaling the revival of growth.

Accordingly, the company’s marketing approach changed and the company shifted gear from cautious optimism to aggressive growth manifested by raising volume targets, accelerating the pace of innovation and increasing brand visibility.

Key highlights of Sales & Marketing in 2009-10 were:

➢ Resounding success of WhiteMagic 1-2-3, a fully automatic top load washing machine range launched in 6-7 kg capacity, which grew segment share by 5 percentage points.

➢ Complete revamp of the Semi-Automatic Washing Machine range, including the introduction of a plastic cabinet line-up.

➢ Launch of 35 new Split Air Conditioners marketed under the Mastermind Chrome & Mastermind Aviator and 5 new Window Air Conditioners (Mastermind Deluxe and Royale).

➢ Launch of 8 microwaves in Convection and Grill, marketed as Whirlpool Magicook.

➢ Launch of a new, premium range of 24 Frost Free Refrigerators in capacities from 300L - 480L under Whirlpool Protton, including a unique fully automatic 3-door format.

➢ Conducting two large scale dealer contact programs in September 2009 and March 2010, through which 15,000 dealers were contacted in 130 towns on each occasion.

➢ Conducting Road Shows for refrigerators - branded “Kabhi Dekha Hai Aise Magic” in