In an ongoing battle with unorganised players, Syska says it will have to strive to boost awareness about branded LEDs
The company will have to work harder now to beat grey-market players in the fast growing LED lights segment.
The Syska Group, a home-grown brand specialising in LED lighting solutions, has invested some Rs 170 crore to build its business thus far. Headquartered in Pune, the firm operates three manufacturing plants in Maharashtra. Since its inception in 2012, the Syska Group has diversified and now sells appliances and mobile accessories. Speaking to Firstpost, Rajesh Uttamchandani, Director, Syska Group, said his company will have to work harder now to beat grey-market players in the fast growing LED lights segment.
Excerpts from the interview:
What is the market size for LEDs in India?
The LED lighting market in India is projected to register a CAGR of over 30 percent during 2016-2021. The Electric Lamp and Component Manufacturers Association of India (ELCOMA) estimates that the LED market in India is expected to grow to Rs 216 billion by 2020. This leap will result in the LED market accounting for about 60 per cent of India’s total lighting industry (approximately Rs 376 billion) in 2020.
What is the ROI you expect on your investments?
Syska operates three manufacturing plants for its lighting products in the country. The company is in line with the government’s mission of 'Make in India', for providing efficient lighting solutions. The manufacturing plants will have a humongous production of lights, varying from bulbs, tube lights, panel lights, industrial lights, among others. This investment by the Syska Group will also facilitate huge employment opportunities. Syska plans to boost manufacturing capacities in the country in the near future. Syska LED is a Rs 900 crore company and we expect to be a Rs 4000 crore to Rs 5000 crore company in four to five years. We expect to become a listed company in the next two to three years.
We have invested about Rs 150 crore in the Shirwal plant, which is a mega project under the government's ‘Make in India’ initiative. We are awaiting land allocation, to the tune of five acres, in the Shirwal MIDC. The production capacity of the plant will be 30 lakh units per month and it will employ around 1,000 employees. The new plant will be operational by December 2018. At full capacity utilization, in three shifts, we will be able to produce some 100 lakhs units a month. Products manufactured will include bulbs, tube lights, downlights, panel lights and outdoor lightings.
At Chakan, we have invested about Rs 10 crore on a 40,000 sq ft plant. It produces around 700-1000 units of industrial lights a day, which we are planning to increase to 3,000 units per day. The number of people employed would be approximately 200. The products manufactured are street lights, flood lights, and other high-end industrial lighting.
We have invested about Rs 10 crore on a 20,000 sq. ft. plant at the Thane MIDC, in Rabale. The facility makes around seven lakh bulbs and 20,000 panel lights a month. The number of people employed stands at about 120. Products manufactured are tube lights and panel lights. The plant has a one-of-a-kind R&D and testing lab with NABL accreditation.
What are the import duties on LED?
Import duties have been increased to 10 percent on the complete product.
How do you explain the huge difference in the prices of your LEDs versus those sold by unorganised players?
Our USP is the competitive pricing range that we provide to consumers without compromising on the quality of the product. The unorganised sector [grey market] can never compete with our quality and the warranty we provide, which stands at two years. Other players offer a one-year warranty.
How do you plan to tackle competition in the category?
A large market-share, of the Indian lighting industry, is with fluorescent light-makers, followed by CFL and HID lamps. Also, our major competitors include the unorganised players. Here, it becomes important to create awareness among consumers about the benefits of using branded LED lights. We are a home-grown brand and we provide consumers with LED lighting solutions at a much affordable price than our competitors. Based on increasing market needs, and trends, our products stand to serve both indoor as well as outdoor lighting purposes.
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