New Delhi: Japanese electronics and appliances maker Panasonic Corp. is consolidating its operations in India by bringing all its existing group companies under one entity—Panasonic India Pvt. Ltd.
The development is part of the global consolidation process that the company started in 2008 with the change in its name from Matsushita Electric Industrial Co. Ltd to Panasonic Corp. In India, the firm runs six separate companies that include Panasonic Home Appliances India Co. Ltd, Panasonic AVC Networks India Ltd, Panasonic Battery India Co. Ltd, Panasonic Carbon India Co. Ltd, Indo National Ltd and Panasonic Asia Pacific Pte Ltd.
These companies manufacture and market home appliances, colour television, LCD television, dry cell batteries, carbon rods, office automation, telecom products, computers, projectors and security systems. All of them will be merged with Panasonic India Pvt. Ltd. now.
Global initiative: The headquarters of electronics and appliances maker Panasonic Corp. in Japan. Tetsuya Yamada / Bloomberg
“We are consolidating our presence here to drive cost efficiency and project one face of Panasonic before Indian consumers,” said Daizo Ito, chief executive, Panasonic India.
According to an executive close to the development, the company is also considering picking up remaining 20% stake in Mumbai-based Anchor Electricals Pvt. Ltd, maker of electrical construction products such as lighting fixtures and electric wires, as a part of the consolidation exercise. In 2007, Panasonic Corp. had acquired 80% stake in Anchor for Rs2,000 crore.
The consolidation is part of the company’s global initiative to unify its corporate brands under one umbrella, said Ito.
“It (consolidation) is a slow process. We are planning to do that one by one. At the same time, we are also streamlining our distribution and logistics and investing in expansion of branch offices and warehouses,” said Sabika Kidwai, general manager marketing, Panasonic. “Currently the company has 10 branch offices mostly in big cities. By the middle of coming financial year, we will have 22 offices across India.”
According to experts, the consolidation will definitely help the company save operational cost. “It makes sense for any company to operate at a centre level and benefit in terms of marketing, finance, human resources and other common support system,” said Purnendu Kumar, associate vice-president, KSA Technopak, a retail consulting firm.
The consumer electronics and white goods market in India is currently estimated at Rs28,000 crore.
Various industry estimates suggest that LG Electronics India Pvt. Ltd with an estimated market share of 25%, Videocon Ltd with 22% and Samsung India Electronics Pvt. Ltd with 17% market share are among the top three players in this market. Panasonic is a relatively smaller player in the country.
According to the company, it has grown steadily in the past two years with its Rs1,400 crore turnover in 2007 growing to Rs2,200 crore in 2008. It expects to generate sales worth Rs4,300 crore in 2009.
“The parent company has promised to invest money in India and we wish to be India’s No. 1 electronics company in the next five years,” Ito said.
Currently, India contributes less than 1% to the company’s global turnover, which stood at Rs4.5 trillion in 2008. “The target is to make it at least 5% in the coming five years,” Ito added.