Wipro Consumer Care and Lighting, which posted the highest growth in the second quarter of FY08 among all of Wipro's businesses, is looking to strengthen its switches and lighting business. WCCL, which saw a revenue growth of 84 per cent, is setting up a plant to manufacture modular switches.
This will be the company's first major expansion in the switching business after the acquisition of the North West Switches brand for Rs 102 crore (Rs 1.02 billion) in May last year. The plant will be located at Haridwar, Uttaranchal, where the company has acquired about six acres for the purpose.
A significant part of the Rs 60 crore (Rs 600 million) capital expenditure earmarked for this fiscal will be spent on setting up the plant, Vineet Agrawal, president, Wipro Consumer Care and Lighting, said.
Wipro's switch manufacturing plant in Faridabad came with the North West acquisition. The Haridwar plant will be operational in the next 8-9 months.
"We are partly utilising our plant at Baddi in Himachal Pradesh for manufacturing switches. But the bigger plant would be in Haridwar," Agrawal told Business Standard. The company has decided to set up the plant in Haridwar due to the financial incentives they are getting in the city.
The size of the market for modular switches in India is estimated to be around Rs 600 crore and is growing at 20 per cent year-on-year.
The Indian business of WCCL is being driven by its commercial lighting business. In the just-ended quarter, the lighting business grew by 45 per cent y-o-y.
According to Agrawal, "In terms of specialised lighting, we have done well in most modern workspaces including the IT, ITeS, banks and insurance sector."
Meanwhile, WCCL has won a major deal to supply lighting systems to the Bangalore International Airport (BIAL). The company, which had earlier supplied lighting to Delhi Metro, has been awarded with the order to partly supply to BIAL, along with other global players.
Although the company declined to share the revenue it would earn from the deal, Agrawal said "it is quite significant".
In commercial institutional lighting spaces WCCL's is now looking beyond metros and experiencing good growth from smaller towns, where it is growing over 30 per cent year-on-year.
Last year, WCCL had added a compact fluorescent lamp plant at its lighting plant in Mysore. The company has also invested in expanding the capacity of its lighting plants in Baddi (Himachal Pradesh), which were executed partly in the previous fiscal and partly in the current fiscal.
WCCL, which contributed Rs 372 crore (Rs 3.72 billion) to Wipro's consolidated revenue of Rs 4,785 crore (Rs 47.85 billion) in the second quarter of the present fiscal, is also experiencing good growth from its modular furniture business, a relatively new entrant to its product offerings. During the quarter, the company sold about 14,000 work stations, and the business grew by 45 per cent y-o-y.
According to Agrawal, Santoor, the company's flagship soap brand also grew well during the quarter. The company is positioning Santoor as a more visible brand in smaller towns and rural areas.
"About 55-58 per cent of our Santoor business comes from rural India. In terms of market share, we drive higher market share in rural than urban," he said.
