Company Products Established Promoter Distribution Production plants

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1 VOLTAS Voltas is India's premier air-conditioning company and a leading provider of engineering and back-up services. Background Promoted in 1954,,Voltas enjoys a strong leadership presence as India's premier airconditioning company, the largest projects exporter in mechanical, electrical and public health works and a market leader in textile machinery and fork-lift trucks.the company's strengths lie in the design and manufacture of industrial equipment, the management and execution of air-conditioning and public work projects, the procurement, installation and servicing of technology based systems, and in being a representative of global technology leaders. It offers engineering solutions for a wide spectrum of industries in areas such as heating, ventilation and air-conditioning, refrigeration, climate control, textile machinery, machine tools, mining and construction, materials handling, water management, building management systems, pollution control and industrial chemicals. Headquartered in Mumbai (Maharashtra),Voltas has factories at Thane (Maharashtra), the Union Territory of Dadra, and Uttaranchal. Its overseas offices are located in Dubai, Abu Dhabi (UAE), Doha, Qatar, Hong Kong and Singapore. The company s promoters,tata Sons hold around 28 per cent of the shares in the company. Foreign investors and the public hold around 21 per cent share each, while domestic financial institutions and non-promoter corporates hold the balance. Voltas has recently gone through a comprehensive restructuring exercise, aimed at bringing the core to the fore.this exercise, conducted between and , comprised of redefining the business focus of Voltas as being an engineering services company. Accordingly it involved reorganising the company s business portfolio, Company Products Established Promoter Distribution Production plants 180 Voltas Cooling Systems, 1954 Tata Sons India, Middle-east, India and Appliances Asia Electro-mechanical Projects Engineering services

2 exiting non-core businesses and exploiting unproductive assets to generate revenues, rightsizing the organisation through focussed voluntary retirement schemes, aggressive cost cutting and financial re-engineering. Electro-mechanical projects & services: Air-conditioning and refrigeration; electrical, mechanical and HVAC (heating, ventilation and air-conditioning) solutions, water management and treatment Products and Services Voltas s operations are organised into four independent business-specific clusters, namely the electro-mechanical projects & services, engineering products & services unitary cooling products for comfort & commercial use, and others. Each of these business segments has its own facilities for market coverage and service to customers.the products under each segment include: Engineering agency & services: Materials handling, machine tools, mining and construction equipment and textile machinery Unitary cooling products for comfort & commercial use: Cooling appliances, commercial refrigeration. Others: Chemicals trading, Voltas is currently the country s second largest brand of window and split air-conditioners with a well-established brand presence (Vertis).Voltas also enjoys a recognised brand presence in precision air-conditioning (Sensicool), water coolers (Tushar) and dispensers (Mini Magic) and commercial refrigerators (Coldcel). Financial analysis Voltas has witnessed a 6 per cent CAGR in its gross sales between 1999 and 2005, with gross sales reaching USD 330 million in Net profits have grown at a higher rate of 27 per cent, mainly 181

3 182 driven by increased revenues and profitability of the electro-mechanical projects and services and the engineering agency and services business divisions. The returns of the company have exhibited a steady improvement, reflecting the success achieved in improving productivity and reducing costs through the company s business restructuring initiatives. Exports have also witnessed a steady increase, mainly driven by the exports of electromechanical projects and services. Voltas' contribution in making Made in India global Voltas today enjoys the distinction of being the country s premier exporter of electro-mechanical projects with a footprint in over 30 countries.the company s overseas electro-mechanical projects business has won recognition from renowned entities in the recent past.these include: Award in from Overseas Construction Council of India for maximum foreign exchange earned and repatriated to India, maximum foreign business attempted, second best performance for maximum turnover Recipient of top exporters trophy in the category of Project exporters for from Engineering Export Promotion Council Award in from Project Export Promotion Council of India for maximum foreign works secured in new areas, second best performance for maximum turnover Currently, through the electro-mechanical projects, the company international operations deliver solutions in diverse engineering horizontals.these horizontals include electrical, mechanical including HVAC, public health systems, plumbing, fire fighting, security, specialised lighting and integrated building management systems.they are provided for a wide range of industries and varied applications including airports, hospitals, hotels and convention centres, commercial, shopping and office complexes, palaces, techno-parks, research and training centres, power stations, defence establishments, textile mills,

4 pharmaceutical plants, district cooling plants, cruise liners and railway systems.voltas has recently executed prestigious projects in these areas in UAE, Qatar, Hong Kong and Singapore and is making concerted market extension drives by targeting prospects in Libya, Botswana, Egypt, Jordan,Vietnam and CIS countries. Factors fuelling Voltas global initiatives Voltas intends to continue aggressively targeting global markets as an avenue for growth in future, primarily capitalising on its impressive track record of implementation of overseas projects and the advantages in cost, delivery and service that it enjoys in specific product lines. The company intends to target four avenues in its quest to emerge as a major global player in the engineering products and services domain within the next few years. Growth as an EPC contractor: Voltas s electromechanical projects business has had a legacy of two decades of noteworthy successes in the Middle East, Far East and South East Asia.This business, includes, among others, the Palace Complex of His Majesty the Sultan of Oman in Muscat, the Bahrain International Airport, and the Chep Lap Kok international airport terminal in Hong Kong and the Mall of Emirates, Emirates Palace Hotel and Burj Towers in Dubai.The company is in the process of making a mark in water and sewage treatment projects. In implementing and securing these projects, the company earned the confidence of the world's leading consultants and project management firms such as Cansult of Canada, Turner International and Bechtel Corporation of USA,Tractbel of Belgium, Sotechni of Italy and the Hospital Design Partnership of UK.Voltas intends to capitalise on these successes to emerge as a major EPC player in the electro mechanical domain over the next few years. 183

5 Increasing exports of manufactured products: Voltas intends to export a wide range of its cooling products - including room airconditioners, split air-conditioners, water coolers, visi-coolers, freezers and chest coolers in the international market.the company intends to achieve this growth in exports either on the strength of its own brand or as a contract manufacturer for other OEM. manufacturers world-wide,terrot, Memminger, Kluber,Terex -O&K, Germany, Fanuc, Mitsubishi Heavy Industries, Japan Tornos, Switzerland,Terex- BL-Pegson,Terex-Powerscreen, UK, Le Tourneau, Australia, Hyundai, Korea for specific products and services.the company is actively seeking to expand its role as a representative of other leading international manufacturers in the domestic market. 184 Absorbing and deploying global technologies: Voltas intends to further leverage on their technology-sharing alliances with overseas collaborators, and enter into fresh collaborations for serving the domestic market as a systems provider. To illustrate,voltas has a new generation of clientele, such as multiplexes, shopping malls, entertainment centres and establishments in the private telecom industry and hospitality in the air-conditioning and refrigeration business.these clients seek solutions encompassing controlled environments, with clean and pure air, and energyefficient systems.the company is well placed to deliver these solutions by leveraging the competencies of its range of partners - for example, building management systems from Siemens, ozone injection systems from Ruks of Canada, screw and scroll chillers from global leaders - coupled with in-house design and manufacturing capabilities. The success of the Vertis brand of room and split air-conditioners is yet another example of the success of alliances.the Vertis brand features advanced technology from Fedders International Inc. USA, one of the world's largest manufacturers of air-conditioners. Representative of leading international manufacturers: Voltas is already an Indian representative of a number of leading Future plans As explained above,voltas intends to change its business focus to that of a provider of value added engineering and marketing services in the immediate future.thus, the company does not intend to make heavy investment in in-house manufacturing facilities and capital expenditure is not expected to be significant in the medium term.the company would need to continue its focus on improving the profitability of its different businesses protecting its brand image in established product lines and in managing working capital in order to manage future growth. Globalisation at a glance Exports to over 30 countries, with awards received by several agencies for its export performance Supported by overseas offices in UAE, Qatar, Hongkong and Singapore Has worked on several prestigious mandates as an EPC contractor in the Middle-east, Far East and South-east Asia Indian representative of a number of leading manufacturers world-wide In the area of cooling systems, partnerships with renowned global names like Siemens and Ruks