LAHORE: Pak Electron Limited (Pel) is planning to take advantage of the blossoming ties India by rolling out its products in Indian Punjab, a market larger than all of Pakistan.
“Out of the 10 million units of refrigerators sold in India annually, we are hopeful to capture at least two to three millions units of the market,” said Pel Managing Director Haroon Ahmad Khan during a corporate briefing at the Lahore Stock Exchange on Tuesday. The country’s second largest home appliance manufacturer plans to introduce its product in Indian Punjab and then gradually spread to rest of the country
The local market is almost ten times smaller than India as 1.3 million is the annual sale of fridges in Pakistan.
“The price of our refrigerators is much higher than refrigerators manufactured in India, but the quality and variety is much superior,” he said.
We don’t want to compete with multinational companies working in India but locally manufactured refrigerators, he added.
Cost of doing business in Pakistan is much higher than India mainly due to high energy costs, interest rates and high wages, he added
PEL is also the largest manufacturer of engineering goods and provides products such as distribution transformers and energy meters to power utilities, industries and individual customers.
In the power division, Pel has a market share of 42% followed by Siemens with 34%.
In home appliances, Dawlance leads with a market share of 49% followed by Pel with 29%, according to 2009-10 data provided by PEL.
Despite a hiccup in revenue during 2011, Khan said the company’s growth stands at an average 22% annually in the last 10 years.
Sales plummeted by 32% to Rs13.5 billion in 2011 as Water and Power Development Authority – the largest buyer of power division products – did not invest in system augmentation and expansion in new villages.
“Being an election year, we hope that Wapda will start to purchase transformers which will boost our power division sales and jack up the overall figure,” said Khan. Pel forecasts sales to reach a new high of Rs25.34 billion in 2012.
Published in The Express Tribune, May 23rd, 2012.
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