Bajaj Electricals Ltd. plans to make and export appliances for brands in Europe and the U.S. as the Indian maker of fans to food processors sees an opportunity when companies worldwide are looking to reduce dependence on China.
“With our manufacturing presence being so strong and our domestic market being so big, it makes sense to look at the export market,” Shekhar Bajaj, chairman and managing director of the company, told BloombergQuint.
Europe and the U.S. barely make any small appliances and largely import fans and other electrical goods from China. The coronavirus pandemic and the subsequent lockdowns across the world broke down supply chains from China. That, coupled with geopolitical issues, has led to discussions on reducing dependence on China.
“So here's a great opportunity for us to become an OEM (original equipment maker) for Europe and the U.S.,” Bajaj said.
As of financial year 2018-19, exports only contributed to 1.4% of the company's revenue, according to its annual report. Those were mostly shipments of finished goods under the Bajaj brand.
Bajaj said the company already has a strong manufacturing presence in India and enough capacity to venture into this segment. However, if demand for its exports rises more than expectations, they could always expand, he said. “It's not a space where major investment is required.”
Bajaj said sales were recovering after the Covid-19 disruption. In May, they stood at 60-65% of last year's level, he said. “We expect at least 80% in June, and return to normal July onwards.”
Watch the full interview here:
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