Japanese Consumer Electronics major Sanyo will enter the Indian market through a wholly-owned subsidiary.
After dragging its feet over credit-related issues, the Japanese company has floated a 50:50 joint venture with BPL Limited to manufacture colour TVs, both under its own brand and under BPL’s.
The deal will incorporate BPL’s Rs 360-crore-CTV business into the joint venture company- Sanyo BPL Private Limited- while the fully owned subsidiary- Sanyo India Private Limited- will be used to bring out other products like washing machines, refrigerators, audio products and ovens over the next six months.
The agreement has cleared the way for the long-pending transfer of BPL’s colour TV business, including its two assembly lines in Noida and Bangalore, to its planned JV with the third largest consumer electronics company in Japan.
Sanyo had been insisting on clearance letters from BPL’s creditors and partners before going ahead with the CTV-venture to avoid inheriting BPL’s credit-related woes.
According to a press release issued by the new company Sanyo BPL, the JV will produce the entire gamut of television ranging from the conventional picture-tube TVs to high-end Plasma and LCD TVs.
It also said that the products will be launched under two brands- the Sanyo for higher-end TVs and BPL for another set comprising of the entire range.
All existing colour-TV related infrastructure of BPL, including manufacturing, sales, service, marketing and distribution networks will be transferred to ‘BPL Sanyo, the release said. TVs from the joint stable, including both the Sanyo and BPL brands, are expected to corner a market-share of 17 per cent over the next five years, BPL-Sanyo added.
Meanwhile, the wholly-owned subsidiary, Sanyo India, will add to its product range in the next six months by bringing out digital cameras and energy-efficient ACs and also target the projector, security products and solar instrument markets later.
BPL has announced that the signing of a MoU with Eveready Industries India, for the sale of BPL and its associates entire holding in BPL Soft Energy Systems.
In September, BPL had announced the sale of its dry-cell business to Eveready for Rs 45 crore, claiming that it had decided to focus on its core strengths, which it claimed, had been identified by Pricewaterhouse Coopers, to lie in “entertainment electronics, medical electronics, engineering plastics and tooling.”
The company, which had around 7 per cent marketshare in the CTV business last year, has been left with near zero presence after it was struck with financial troubles more than a year-and-half ago.
BPL shares were stable during the day’s trade at the BSE, with a closing price of Rs 39.05.