Appliance manufacturer Haier has announced its plan to invest ₹1,000 crore in the next three years for manufacturing expansion and backward integration. This significant investment includes the establishment of a plant dedicated to injection molding and sheet metal production. By doing so Haier aims to not only enhance its production capacity but also localize the production of vital components for refrigerators, washing machines, and air conditioners.
Appliance and television maker Haier is going to invest ₹1,000 crore on manufacturing expansion and backward integration over the next three years including components a top company executive said.
This includes ₹400 crore currently lined up to set up a plant for injection molding and sheet metal which are major input materials used in refrigerators and washing machines.
“The phase II expansion of Haier’s Greater Noida plant is now going to commence which will entail a fresh investment of ₹400 crore which will help us to improve both production capacity (of finished product) and backward integration,” said Haier India president Satish NS.
“Overall we plan to invest around ₹1,000 crore in the next three years on backward integration of essential components for refrigerators washing machines and air conditioners. Additionally, there are plans to localize the kitchen segment soon” he said.
The investment comes at a time when the electronics industry is battling a slowdown in consumer demand. Most companies are going slow on manufacturing investment except those aiming for government financial benefits such as production-linked incentives.
Analysts tracking the company’s regulatory filings to the Registrar of Companies (RoC) said Haier has already invested considerable money in India. “There is a rapid increase in fixed assets of the company and the fresh ₹1,000 crore investment indicates the shareholders’ confidence in its robust performance,” said business intelligence firm AltInfo founder Mohit Yadav.
As per the latest RoC filings, Haier India’s property plant and equipment value in calendar 2021 was ₹1,364 crore as against ₹478 crore the year before. The company follows the calendar year as its fiscal year. Haier India is yet to file the financials for 2022.
Haier India is a subsidiary of Haier Singapore Investment Holding a part of Haier Group which is one of the world’s largest appliance makers. As per RoC filings, Haier India’s revenue in 2021 was ₹4,489 crore while its net profit was ₹50 crore.
“We are one of the fastest growing consumer durable brands in India with a five-year CAGR of 20% including the Covid-19 period. In the year 2022, the revenue increased to ₹5,500 crore. We have seen a growing momentum in net profit in the last five years consistently except for 2022 where increasing material cost impacted the whole industry” said Satish.
