Crompton Greaves Consumer Electricals moves into built-in kitchen appliances

Electrical equipment company Crompton Greaves Consumer Electricals has made a foray into built-in kitchen appliances, a market that is only at around Rs 2,200 crore. The opportunity for the company is in the top 10 cities, where high urbanisation levels will trigger demand for this product category. The company is a name in fans, domestic pumps, water heaters and lighting.

According to Mathew Job, the company’s CEO, a couple of filters were employed before entering the business. “The segment needs to be of scalable size and should have underserved needs. Plus, we must have the ability to serve those needs,” he said. The company has launched its range of chimneys, hobs, built-in ovens, built-in microwaves and dishwashers.

“In the large cities, a modular kitchen is logical since it offers better space utilisation. Our estimate is that this market can grow easily by around 10 per cent each year," he added.

The target is to hit a revenue of Rs 350 crore by the third year. A key platform for the business has been the recent acquisition of Chennai-based Butterfly Gandhimathi Appliances for a total consideration of Rs 2,076 crore. It gives Crompton a strong presence in southern India.

Butterfly, a well-established kitchen and small domestic appliances brand in that part of the country, has a product range that includes mixer grinders, table-top wet grinders, pressure cookers, stainless steel vacuum flasks, LPG stoves and non-stick cookware.  The announcement, at the time of the deal, said it is amongst the top three pan-India kitchen and small domestic appliances players.

“Butterfly has a good R&D base and manufacturing operation as well,” explained Job.

For its built-in range, Crompton is looking to outsource the products from “the best vendors from countries such as China and Turkey.” In terms of distribution, there are the “kitchen stores” that are multi-brand in nature, with the company also setting up its premium exclusive brand outlets called “Crompton Signature Studios.” Job says there are three in Pune now and the focus will be on the top 10 cities.

“They account for 50 per cent of the demand,” Job added, noting that there is another positive part to this move: these cities offer a good combination of premium residential buildings and older ones as well.

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