New Delhi, May 5 (UNI) In an all cash Rs 102 crore deal, Wipro's Consumer Care and Lighting division today acquired the North-West Switches business from North-West Swithchgear Ltd (NWSL).
The company has also entered into an manufacturing agreement with NWSL for a period of five years under which NWSL will manufacture switches under its brand name, while Wipro will take care of the sales and plant and machinery.
''Under this acquisition, which falls under the sub-compete clause and is on a sub-contractor basis, we have the Intellectual Property Rights for the brand while the manufacturing rights remain with NWSL,'' Wipro Consumer Care and Lighting President Vineet Agarwal told reporters here.
On why the deal with NWSL, Mr Agarwal said,''The electrical switches segment is absolutely synergistic to our current business mix of domestic, commercial and institutional lighting. North West is a very reputed brand name amongst customers and architects and as it has maintained a distinct imagery and position in the market, it gives an ideal entry into this fast growing segment,'' Mr Agarwal said.
Asked about whether any expansion plans were in the offing with this deal, Mr Agarwal said, ''the NWSL factory in Faridabad has an annual turnover of Rs 38 crore, and the capacity is expected to increase at the rate of 50 per cent. Going by this rate, we don't see the need to put up another unit for the next two years or more.'' Wipro has also acquired the one-and-a-half crore worth wiring business of NWSL -- Equilay, under which it has the license to sell its products.
''Although the business is small, we see immense potential in the wiring market in the coming years, and are aggressively looking to tap that,'' Mr Agarwal said.
NWSL has a trickling export market to the UAE and Nepal, which Wipro is aggressively aiming for. ''The company exports switches and other lighting gear to the UAE and Nepal and that is one area, we will be looking at aggressively,'' Mr Agarwal said.
The modular switches market is pegged at Rs 400 crore and is growing at 25-30 per cent annually, of which NWSL's contribution is Rs 38 crore.
Wipro Consumer Care and Lighting business reported revenues of Rs 600 crore for the financial year ended 2006, double of what the company reported in the 2003 fiscal at Rs 300 crore.
UNI RA YA PM1752