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.
COMMENTS (19)
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I like the confidence of PEL. When there is will there is a way. Lets encourage competition. There is always room for improvement. Lets see who work harder!
@US engineer: While I agree with you on IIT graduates, I have had a chance to work with Indian engineers coming from other institutes as well. I did not find anything extra ordinary in them. Its just that India is much bigger with a big population so you get a lot of them.
PEL has to improve its designs and lower the prices. They probably would have to open manufacturing facilities there in order to cut costs on distribution.
Yeah right -- PEL's confidence must come from their immense success in all other global markets!! Or have they been holding back their amazing products just for Indians?
Never heard of this brand before. If the company wants to succeed in the competitive Indian market, it should not only afford good quality, but the pricing should also be competitive.
The Indian market is already saturated with well known foreign and Indian brands, and if this company is intending to challenge the already established brands (both foreign and Indian), then its work is already cut out. Anyway, good luck to the Pakistani company.
While i think that the prices of electronics are lower in India due to the stiff competition but i think it is a welcome move by PEL. though i have never heard about this brand but business is the field i want our two countries to compete on. let it come, let the best product win.
@Surya: PEL competes with them in Pakistan, so the chances are not so bleak!
In any case, its a positive endeavour by a Pakistani firm.
The Indian market is growing very fast and there is room for new players as well.
I see no reason why this company cannot succeed ?
THe quality of Indian engineers and products is far superior than PAkistan thanks to their world class IITs. I think that Indians will capture more than 20% of Pak market than the other way round.
@yusuf
I don't need to use it to recognise bluster. If a consumer wants to buy premium refrigerators they would buy Hitachi, Fujitsu etc. If one want to buy economy then LG Samsung, Whirlpool etc. Since PEL prices are high as mentioned in the article above, PEL is going to compete with Hitachi and Fujitsu, which is about 2% of the market. How is PEL going to capture 20% of Indian fridge market by competing in the 2% segment? Plus where is the After Sales Service network?
I think Indians under estimating Pakistanis companies sepcially in this sector. PEL, Dawlance, Orient and Waves etc has really fine prodcut line and quality. About time this perception changes, when they actually use these products. Without using or even see a product, you cant pass judgments.
Though 20% share of Indian market is a long shot only on the basis of production facilites PEL or others already have.
Welcome PEL..............Let Indians and Pakistanis henceforth compete in business and commerce. ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ As an indian I welcome PEL and all other Pakistani brands.....let me assure you that I shall seriosuly evaluate the new brands.
@Shyam! Have you used PEL?? ;)
At last some forward thinking by a Pakistani Company, till now everyone was just talking but it seems like PEL has started doing it's home work.. It's the high time that our companies should go international.. One think that I believe PEL needs to work on is their refrigirator designs, some more research needs to be done on the body.. quality wise they are good and their other home appliances are also really good. I hope they soon take the next step...
No way......................PEL products are expensive as compared to those available in India
LG (market leader with 30% share), Samsung, Whirlpool, Godrej & Videocon controls 95% of the indian market. so you want to compete with them? good luck..
Bluster again. Even Chinese could not make it into the market dominated by Korean and Indian brands (and Whirlpool as well).
@Zalim singh: scared r u ????
no chance. I am from this business and will confirm, price is THE factor.