WHITE GOODS INDUSTRY USER’S

PERSPECTIVE

WHIRLPOOL OF INDIA LTD

CONTENTS

•

•

•

• INDUSTRY TRENDS

• DESTINATION INDIA

• REQUEST ITEMS TO STEEL MANUFACTURERS

S NO.

1.

2.

3.

4.

5.

6.

WHITE GOODS INDUSTRY & MARKET

ASV LINKAGE TO STEEL PRICES

WHITE GOODS IND. GROWTH & STEEL REQ.

- Lee Scott, CEO Wal-Mart

“…India, with a middle class of 50 million to 60 million people,

is ripe for growth…”

Dan Scheinman, Cisco System Inc. Business Week, August 2005

“We came to India for the costs, stayed for the quality and are now investing for

innovation.”

A T Kearney FDI Confidence Index 2005

India is among the three most attractive FDI

destinations in the world

Jack WelchGeneral Electric

“India is a developed country as far as

intellectual capital is concerned.”

India has among the highest returns on foreign

investment

US Department of Commerce

By 2032, India will be among the three largest economies

in the world

BRIC Report by Goldman Sachs, October 2003

Destination India Destination India

2.4

2.6

2.9

13.5

4.5

1.0

1.1

1.2

1.2

1.8

2.2

INDIA

BRAZIL

CANADA

SPAIN

ITALY

FRANCE

UK

CHINA

GERMANY

JAPAN

USA

3.2

4.95.5

6.1

8.19.2

-10

-8

-6

-4

-2

0

2

4

6

8

10

12

India

(64-74)

India

(75-84)

India

(85-94)

India

(95-04)

India

(05-06)

India

(06-07)

Max

Average

Min

Trillion $ Economy … Rapid Growth

• Huge investments in infrastructure

• Foreign Direct Investments in key sectors, Special Economic Zones

• Direct taxes, Import duties progressively lowered

India Where China Was in Mid-90’s

Indian Economy at an Inflection point of

Sustainable Growth

Indian Economy at an Inflection point of

Sustainable Growth

WHITE GOODS INDUSTRY AND MARKET : TRENDSWHITE GOODS INDUSTRY AND MARKET : TRENDS

The housewifeThe housewife The smart

discerning multitasking woman

The smart discerning multitasking woman

Changing consumer mindsets and LifestylesChanging consumer mindsets and Lifestyles

WPL Consumers: Shifts in Mindsets and LifestylesWPL Consumers: Shifts in Mindsets and Lifestyles

Design Excellence ….. Lead by Innovation Design Excellence ….. Lead by Innovation

Industry Growth

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

1 2 3 4 5

Time Period

Gro

wth

( I

n M

illi

on

s)

FC/ AC

FF

DC

White Good Industry Growth White Good Industry Growth

3.894.3

4.96

5.97

7.8

65% 57% 54% 46% 37%

12%13% 14%

18%

13%

4%4% 4%

5%

8%

11% 15% 14% 15%17%

0%10%

20%30%40%50%

60%70%80%

90%100%

2004 2005 2006 2007 2008

>351FF

301-350FF

271-300LFF226-270LFF<=225 FF

>=226 DC

185-225LDC<180L DC

WG Industry touches 7.8 M

units in 2008

Refrigeration Industry growing

by 18.5 %

WG Industry touches 7.8 M

units in 2008

Refrigeration Industry growing

by 18.5 %

• Salience Shift

happening

towards higher

capacities

• Salience Shift

happening

towards higher

capacities

2004 2005 2006 20082007

WG Steel Requirement

HDG

9%

PPGI

24%

CR- RMP

16%

EGI / Finishes

23%

CRCA

28%

�Total Steel requirements for WG Industry in year’08 ~ 96 K MT

� 40 % of total requirement is imported from other countries

� Not a single domestic player to cater requirements of EGI & special

color finishes

� Increasing demand of thinner gauge material over a period of time

�Total Steel requirements for WG Industry in year’08 ~ 96 K MT

� 40 % of total requirement is imported from other countries

� Not a single domestic player to cater requirements of EGI & special

color finishes

� Increasing demand of thinner gauge material over a period of time

White Good Industry Steel requirementsWhite Good Industry Steel requirements

ASV Movement 2005-2008ASV Movement 2005-2008

Avg. sales value/ Unit ( White Good Ind.)

8000

8400

8800

9200

9600

10000

10400

10800

Marc

h'0

5

June'0

5

Sep'0

5

Dec'0

5

Marc

h'0

6

June'0

6

Sep'0

6

Dec'0

6

Marc

h'0

7

June'0

7

Sep'0

7

Dec'0

7

Marc

h'0

8

June'0

8

Sep'0

8

Time Period

Price ( INR / Unit)

H R Price Trend

23000260002900032000350003800041000440004700050000

Mar

ch'0

5

Ju

ne'

05

Sep

'05

De

c'0

5M

arch

'06

Ju

ne'

06

Sep

'06

De

c'0

6M

arch

'07

Ju

ne'

07

Sep

'07

De

c'0

7M

arch

'08

Ju

ne'

08

Sep

'08

Time Period

Price ( INR / M

T)

� WG Ind. forced to increase their product price on A/C of unprecented steel increases

� Full impact of steel increases not getting passed to consumers

� Future increases in ASV by WG Ind. will lead to de-accelerating growth

� WG Ind. forced to increase their product price on A/C of unprecented steel increases

� Full impact of steel increases not getting passed to consumers

� Future increases in ASV by WG Ind. will lead to de-accelerating growth

ChallengesChallenges

Steel TrendsSteel Trends

White Good Steel Industry ……… Trends & ChallengesWhite Good Steel Industry ……… Trends & Challenges

�Shift towards thinner gauges to reduce weight

�Stringent tolerance requirement to control finishing process variation.

�Smooth and fine surface finish for end used appeal

�Service center for supplying prepainted / CTL requirements

�Technology support / Resource availability for developments

�Shift towards thinner gauges to reduce weight

�Stringent tolerance requirement to control finishing process variation.

�Smooth and fine surface finish for end used appeal

�Service center for supplying prepainted / CTL requirements

�Technology support / Resource availability for developments

� Next level of technology to meet thinner gauges requirements

� Complexity due to more design variants / SKU’s

� Color finishes & Metal ( CFM) cost and availability

� Next level of technology to meet thinner gauges requirements

� Complexity due to more design variants / SKU’s

� Color finishes & Metal ( CFM) cost and availability

White Good Steel Industry ……… Request Way Forward White Good Steel Industry ……… Request Way Forward

�Price revision mechanism based on raw material cost , conversion cost

& profit margin

�Technology next level to meet thinner gauges , tolerance & color finishes

requirement

�Price Index Publication ( like CRU) for domestic steel prices and linkage

with global prices

� Service center for supplying CTL requirements

�Price revision mechanism based on raw material cost , conversion cost

& profit margin

�Technology next level to meet thinner gauges , tolerance & color finishes

requirement

�Price Index Publication ( like CRU) for domestic steel prices and linkage

with global prices

� Service center for supplying CTL requirements

Every Home … Every where .. With Pride ,

Passion and Performance …… !!!!!